According to PYMNTS.com, the outlook for blockchain in 2026 is being framed not as a breakout year but as a critical maturity test. In a podcast conversation, PYMNTS CEO Karen Webster and Citi’s global head of digital assets, Ryan Rugg, dissected five key predictions: digital assets becoming standard in institutional portfolios, a breakthrough in real-world asset tokenization, DeFi going enterprise, the rise of CBDCs and regulated digital money, and regulatory clarity shaping winners. They suggest the defining question is no longer about the technology’s viability, but which long-held assumptions can survive contact with the operational realities of major financial players. Institutional allocations, currently around 1% to 2%, are expected to see broader participation rather than a dramatic surge in exposure. Rugg noted the conversation is shifting from “should we?” to “how much?” as infrastructure and custody frameworks mature.
Institutional Adoption: The Slow Burn
Here’s the thing: the “suits and ties” showing up is a huge deal, but it doesn’t mean they’re going all in. Rugg’s point about moving from “should we?” to “how much?” is the perfect summary of this phase. The hype is over, and now it’s just another asset class to be weighed, risk-assessed, and slotted into a portfolio. But let’s be real—that 1-2% allocation figure is telling. It’s a toe in the water, a pilot program budget. It’s presence, not predominance. And that’s probably the healthiest place for this to be right now. It means the crazy volatility and “get rich quick” narrative is being replaced by boring, systems-level thinking. The infrastructure has to hold, and the compliance officers have to sign off, before that number creeps up. It’s a grind, not a explosion.
Tokenization Needs Cash, Not Just Code
This is where the rubber meets the road. Rugg nailed it by saying the missing piece was “cash on chain.” You can tokenize a bond all day, but if the payment settles three days later through a legacy bank wire, what’s the point? The technical feasibility is there now with stablecoins and tokenized deposits. But, and this is a huge but, Webster’s point about enterprise readiness is the real bottleneck. Think about it: corporate treasuries and asset managers have built entire empires on batch processing and end-of-day reconciliation. Their systems, their controls, their entire workflow is built for that rhythm. Moving to real-time, 24/7 settlement isn’t a software update; it’s a cultural and operational earthquake. So it starts with the simple stuff—tokenized money market funds. It’s familiar, it’s close to cash, and it’s a safe sandbox to learn in. The complex stuff will take years.
DeFi and Regulation: The Controlled Future
I love the skepticism here. The idea that “DeFi will go enterprise” in its pure, permissionless form is a fantasy for the foreseeable future. Rugg is right—highly regulated institutions are not going to hand over control to a smart contract and a DAO. No way. What we’ll see instead is a co-opting of the mechanics. Think permissioned blockchains, known counterparties, and regulated environments that use some DeFi concepts but with all the guardrails firmly in place. And that ties directly into the next big shift: regulation as a framework. This is massive. For years, regulation was this scary, ambiguous cloud hanging over crypto. Now, it’s becoming the rulebook. Companies that can navigate it, absorb the compliance costs, and still operate profitably will win. The others will fade. It’s a filter, just like it was for FinTech. And honestly, it’s a sign the industry is growing up.
The Messy Reality of Integration
So what’s the real prediction for 2026? It’s the least dramatic one. It’s about mindset. Blockchain and digital assets will stop being a special topic and start being part of the normal, boring financial dialogue. The reality, as Rugg says, will be messy. Uneven adoption. Fragmented rules across different countries. Lots of trial and error. It won’t feel like an outlier anymore. It’ll feel like a complicated, evolving piece of tech that some departments use and others ignore. Basically, it’ll start to feel normal. And in the world of high-finance tech, “normal” and “boring” are the ultimate signs of success. The technology itself is proven. Now comes the hard part: the business models, the integration, and making it work day-in, day-out inside the giant, slow-moving machine of global finance. It’s a marathon, and 2026 is just another mile marker.
