According to PYMNTS.com, a December 2025 report from PYMNTS Intelligence and Citi reveals a fundamental shift in how financial blockchains are being designed. The key finding is that new networks are being built with embedded identity, compliance, and risk controls from the ground up. This isn’t a philosophical choice but a commercial necessity, as the report argues blockchain can’t move beyond experimentation in regulated markets without these integrated controls. The immediate impact is the emergence of a new class of networks that aim to keep the efficiency of distributed ledgers while meeting the strict standards of major financial infrastructure. Adoption is consequently happening in narrow, high-confidence use cases like internal treasury moves and interbank settlement, where regulatory clarity is highest.
The Trust Pivot
Here’s the thing: the original crypto ethos of “don’t trust, verify” was always going to hit a wall with big banks and asset managers. For them, trust isn’t the enemy—it’s the entire product. It’s what they sell. So this shift Citi is highlighting isn’t surprising, but it is definitive. We’re watching the technology pivot from being an alternative to the financial system to being a potential upgrade for its plumbing. The hardest part for an institution isn’t the tech integration, it’s getting past the risk and compliance committees. A blockchain that can show its built-in KYC and AML controls? That shortens the approval process from years to maybe months. That’s the real unlock.
The Trade-Offs Ahead
But embedding all this identity and compliance creates new challenges, and the report nails them. Privacy is a huge one. How do you balance the transparency regulators demand with the confidentiality clients expect? Techniques like zero-knowledge proofs are intellectually cool, but try explaining a ZK-proof to a traditional bank auditor. Good luck. Then there’s interoperability. If every bank consortium builds its own permissioned, compliant network, we just get a new set of walled gardens. The next big task is making sure these identity frameworks can talk to each other across networks. Otherwise, we’re just digitizing the old fragmentation.
Why This Matters More
This evolution lacks the drama of “to the moon” memecoins, but it’s far more consequential for how money actually moves. Basically, the industry is laying groundwork for durable, boring, useful adoption. The report frames it perfectly: blockchain is becoming less of a disruptive alternative and more of a facilitator for a reliable trust infrastructure. It’s about making the backend of finance—settlement, collateral management, cross-border wholesale payments—faster and clearer while keeping all the guardrails. That might not be sexy, but it’s what moves the real money. And in the end, that’s what will determine if this technology sticks around or remains a niche experiment.
