Executive summary
In 2025, boards rank cyber and operational resilience among the top systemic risks. Permissioned blockchains and tokenization give banks a way to harden the transaction layer, shrink settlement and counterparty risk through atomic settlement, automate compliance data sharing, and modernize custody and identity controls. Recent work by the BIS, SWIFT, MAS/Project Guardian, and leading banks shows how these capabilities are moving from pilots to production.
What “blockchain” means for banks in 2025
For regulated institutions, this typically means permissioned distributed ledgers, tokenized deposits/central bank money, and tokenized real-world assets that interoperate with existing rails. The BIS says tokenization integrates messaging, reconciliation, and settlement on one programmable platform, enabling contingent, atomic delivery-versus-payment. SWIFT is trialing a single window into multiple digital asset and CBDC networks to reduce fragmentation and security gaps at the edges.
1) Tamper-evident records and better forensics
Immutable, time-stamped ledgers create auditable histories across institutions without manual reconciliation. Professional bodies note stronger data integrity, traceability, and near real-time assurance—useful for incident response and fraud investigations.
2) Lower settlement and counterparty risk via atomic DvP/PvP
Co-hosting money and assets on a shared ledger allows conditional, simultaneous transfer of ownership and payment, reducing fails, exposure windows, and operational breakpoints. Public issuances and pilots (e.g., Germany’s KfW bond with central-bank-money DvP) illustrate the pattern.
3) Compliance that’s data-rich by design
Travel-rule style transparency is expanding. In June 2025 FATF updated Recommendation 16 to harmonize payment information, add anti-fraud tooling, and strengthen cross-border data consistency—guidance that banks can embed into on-chain payment workflows. FATF also published best-practices on Travel Rule supervision to help supervisors and institutions operationalize secure information exchange.
4) Shared KYC utilities and secure data sharing
National e-KYC networks using permissioned ledgers show how verified customer data can be shared among regulated participants with strong governance, accelerating onboarding while tightening control. The UAE KYC Blockchain Platform continues to expand across banks and public bodies.
5) Interoperability without creating new perimeter risk
Fragmented platforms create security islands. SWIFT’s 2025 trials to route tokenized assets and interlink CBDCs through a familiar, certified interface aim to give banks one hardened access point rather than many ad-hoc connectors.
6) Modern custody and key management
Institutional custody increasingly combines hardware security modules (HSM) with multi-party computation (MPC) to remove single points of private-key failure. European regulators even flag MPC wallets as a good practice for safekeeping crypto-assets.
7) Quantum-ready security experiments
With post-quantum cryptography on the horizon, banks are piloting quantum-safe controls on tokenized assets. HSBC demonstrated PQC-secured transfers and cross-ledger movement for tokenized gold on its Orion platform—useful for future-proofing critical payment and custody flows.
8) Liquidity and collateral controls you can program
Tokenized deposits and on-chain cash free banks to embed guardrails: allow-lists, spending controls, intraday expiries, and collateral re-use rules. JPMorgan’s tokenized cash rails process roughly $1B of wholesale value daily, pointing to operational maturity for programmable controls.
9) Cross-border resilience with wholesale CBDC
Multi-CBDC platforms like mBridge target instant PvP FX and settlement, cutting correspondent-banking exposure paths and operational leakage. The project reached an MVP phase in 2024 and is inviting additional participation. (bis.org)
10) Prudential guardrails and market discipline
The Basel Committee’s 2024 disclosure framework standardizes public tables and templates for banks’ crypto-asset exposures from 1 January 2026, improving transparency and risk management practices across the sector. (bis.org)
Implementation checklist for CISOs, CROs and COOs
- Start permissioned, not public
Select a ledger that supports granular permissions, private data collections, HSM/MPC key management, and robust identity. Align with your institution’s PKI and secrets-management policies. - Design for atomicity and segregation of duties
Use smart-contract controls for DvP/PvP, multi-sig or MPC approvals, and role-based policy enforcement. Test rollback/exception paths before production. - Embed compliance in the flow
Collect and transmit FATF R16/Travel Rule data at initiation, not post-facto. Use allow-listed counterparties and wallet-screening to prevent sanctioned interactions. - Plan for crypto-agile upgrades
Adopt crypto-agility and PQC evaluation roadmaps now—especially for tokenized cash, custody, and interbank messaging touchpoints. - Interoperate through trusted hubs
Prefer gateways vetted by existing control frameworks (e.g., SWIFT trials) to reduce integration sprawl and security variance across chains.
Case studies to watch
HSBC Orion and Gold Token
Tokenized gold was opened to Hong Kong retail with bank-grade custody and later tested with post-quantum protections and cross-ledger interoperability.
SWIFT digital asset and CBDC interlinking
Live trials in 2025 aim to give banks one interface to multiple tokenized networks, reducing fragmentation risk and operational overhead.
Project Guardian: tokenized bank liabilities
Industry papers in 2025 outline design and risk considerations for using tokenized bank liabilities in FX and transaction banking.
Frequently asked questions
Do banks need blockchains if real-time payments already exist?
Yes—blockchains address different risks: unified data/settlement layers, atomic DvP/PvP, programmable controls, and shared compliance proofs across counterparties and assets, not just fast messaging.
Is on-chain data privacy compatible with AML?
Emerging privacy-enhancing techniques (e.g., zero-knowledge proofs) aim to preserve user privacy while providing regulators with pass/fail compliance attestations. BIS and central banks are actively researching these trade-offs.
Where should a bank start?
Target intraday liquidity, collateral mobility, and inter-affiliate settlement—domains with clear control benefits and measurable savings—before expanding to external settlement and customer-facing flows.
