The next step for cryptocurrencies is not in the United States but in emerging markets.

Author: Liam Akiba Wright; Translation: Chopper, Foresight News

Compared to the lively US crypto market, Israel and Pakistan staged a more low-key but profoundly meaningful test this month. The truly critical industry shift in 2026 may be happening where digital assets are deeply integrated with domestic currencies, banking systems, and financial infrastructure.

Israeli crypto company Bits of Gold announced that after a two-year pilot, the Israel Securities Authority has approved the issuance and circulation of BILS, a stablecoin anchored to the Shekel. Just a few days ago, Pakistan’s State Bank issued Circular No. 10 of 2026, officially repealing the virtual currency ban that has been in place since 2018.

Pakistan’s new regulation explicitly states: under a compliant regulatory framework, licensed virtual asset service providers (VASPs) and approved operating entities can open bank accounts.

These two measures are on a completely different level from the US spot ETF boom, but they point to the underlying logic that will determine the future of the crypto industry: whether cryptocurrencies can transcend their role as mere investment tools and truly integrate into mainstream financial infrastructure.

The US has provided regulatory backing, liquidity, and sparked a contest over digital dollar dominance. Meanwhile, other countries and regions are testing a different set of foundational capabilities: whether crypto can seamlessly connect with local fiat currencies, bank accounts, merchant payment settlements, and establish practical, enforceable market regulation rules.

Perhaps we need to redefine the criteria for global crypto adoption. Bitcoin ETFs merely offer investors an additional asset allocation channel, while compliant local fiat stablecoins enable users to hold their national currency directly on the blockchain.

When central banks allow crypto institutions to open compliant accounts, they are building a bridge to integrate the industry into the formal banking system. ETFs recognize cryptocurrencies as asset classes, but local stablecoins and bank access are the real tests of whether crypto can evolve into a usable national financial infrastructure.

Currently, all of this remains in early pilot stages. BILS still needs to complete formal issuance and real-world deployment; Pakistan still needs to cultivate licensed service providers and establish stable banking partnerships. Other regions are also advancing: Hong Kong’s new stablecoin licensees await official launch; the UAE, South Korea, Japan, the UK, and the EU are each implementing different parts of a comprehensive crypto adoption system, including payment tokens, merchant settlement, market regulation, licensing, and risk management.

The UAE still needs to clarify the relationship between the dirham token issuance and central bank registration. But the trend is becoming clearer: by 2026, the practical deployment focus of the crypto industry is increasingly centered on the deep integration of digital assets with fiat currencies, banking, merchants, and clearing and settlement systems.

Local fiat currencies and banking services

Bits of Gold states that the approved BILS will initially be issued on Solana, with pilot partners including Fireblocks, QEDIT, Ernst & Young, and the Solana Foundation.

The policy significance lies in bringing the local fiat onto the blockchain. BILS introduces the shekel into an on-chain market still dominated by US dollar stablecoins, raising the question: can a national currency be programmable without ceding the entire payment layer to dollar tokens?

This is a contest over monetary sovereignty. The US dollar stablecoin has become the primary settlement medium in crypto markets; once the shekel stablecoin is successfully issued and popularized, Israel can build a national currency payment channel within the same blockchain infrastructure. Its value isn’t just about market hype but depends on whether wallets, exchanges, payment providers, and compliance agencies are willing to actively adopt and use it long-term.

Pakistan, on the other hand, is filling a key gap with bank integration. The new regulation from the State Bank replaces the 2018 ban, allowing supervised institutions to open bank accounts for compliant virtual asset companies and their users. It also requires all bank onboarding to meet risk control reviews, documentation, fund monitoring, and user risk screening, strictly adhering to the country’s virtual asset regulatory framework.

This fundamentally changes the environment for licensed crypto firms. Bank accounts are the most basic infrastructure of the financial system, directly determining whether compliant institutions can custody customer funds, perform reconciliation, conduct due diligence, and bring transactions into regulatory oversight.

In Pakistan, where on-chain crypto adoption has long ranked among the world’s highest, bank access will decide whether the industry remains in informal, untraceable circulation or moves into a traceable, regulated, and institutionalized development stage.

Hong Kong is also following a path of licensing first, then operational deployment. On April 10, the Hong Kong Monetary Authority issued stablecoin issuance licenses to two institutions: Anto Financial and HSBC Hong Kong. The licenses took effect on the same day. This marks Hong Kong’s transition from policy planning to licensed entity deployment, with subsequent steps awaiting official launch and market adoption.

By 2026, the global crypto infrastructure layout is clearly visible:

Brazil, Singapore, Thailand, and the Philippines are also advancing crypto compliance, from virtual asset licensing and stablecoin regulation to tokenized clearing, cross-border tourism payments, and bank custody services.

Regulatory rules are becoming the new financial infrastructure

The regulatory framework itself is evolving into a foundational industry infrastructure.

Japan’s Financial Services Agency plans to upgrade crypto asset regulation from the Payment Services Act to the Financial Instruments and Exchange Act, strengthening disclosure, institutional risk controls, market manipulation oversight, insider trading restrictions, regulatory authority, and user protection mechanisms. This means crypto assets will be incorporated into a strict financial regulatory system, with licensing contingent on compliance, ongoing supervision, and accountability.

This also confirms that regulation design itself is a form of underlying infrastructure. Markets rely on legal frameworks to define access rights, custody qualifications, marketing boundaries, and legal responsibilities for trading activities.

The UK is steadily building its regulatory system. From September 30, 2026, to February 28, 2027, new crypto business license applications will be open. The new rules will fully take effect on October 25, 2027, advancing licensing, ongoing supervision, consumer rights, asset custody, prudent operation, and anti-market manipulation measures.

The EU’s MiCA regulation has been fully implemented, establishing a unified crypto rule system covering transparency, mandatory disclosures, institutional access, daily supervision, consumer protection, market fairness, and financial stability.

Global regulation is no longer a single-country effort but a multi-region coordinated push. The biggest change in 2026 is that regulatory rules will directly determine whether crypto products can enter mainstream, formal financial channels.

The UAE has introduced a payment token regulatory framework, with the central bank publishing a list of licensed institutions; several financial institutions have also been approved to issue dirham stablecoins (DDSC) for institutional payments, clearing, liquidity management, and cross-border trade settlement. Currently, these are limited to institutional scenarios, with large-scale retail adoption still to be tested.

South Korea is also completing its merchant payment segment. In March, Crypto.com partnered with KG Inicis to integrate crypto payments into a vast merchant network, serving foreign tourists and domestic e-commerce users, with merchants able to choose fiat or digital asset settlement. K Bank in South Korea is also testing cross-border payments with Ripple, exploring the integration of banking systems and crypto payment channels. The core value of these efforts is extending crypto applications from investment to real-world scenarios like checkout, cross-border remittances, and daily spending.

Deployment is the ultimate test

The US-centric narrative remains dominant, given its massive scale. As of April 29, the total crypto market cap approached $2.59 trillion, with Bitcoin’s market cap around $1.56 trillion. US dollar stablecoins still dominate market liquidity, with USDT’s 24-hour trading volume about $111.5 billion, and USDC about $47.8 billion.

The large scale ensures that US policies and the dollar settlement system remain at the global forefront. The stability coin game behind the CLARITY Act is essentially a contest for economic dominance over the digital dollar. Dollar liquidity remains an irreplaceable core pillar of global crypto infrastructure.

But actual usage data is rewriting the standards of evaluation. Chainalysis data shows that in 2025, the actual economic circulation of stablecoins worldwide reached $28 trillion, with projections reaching $719 trillion by 2035, and in optimistic scenarios possibly approaching $1.5 quadrillion. While these forecasts are model-based, they point to a clear trend: the value of stablecoins has extended from mere trading collateral to core infrastructure for payments, corporate treasury pools, and cross-border clearing.

Emerging markets are at the center of this transformation. Chainalysis’s global crypto adoption rankings show India leading, followed by the US, Pakistan, Vietnam, and Brazil, covering all income levels. The key to sustained adoption lies in deposit channels, regulatory clarity, and the maturity of financial and digital infrastructure—precisely the core issues tested by Pakistan’s bank access and Israel’s local stablecoin pilots.

The International Monetary Fund also warns of risks: cross-border stablecoin flows could impact exchange rates, cause local currency depreciation, increase dollar premiums, and threaten overall financial stability. Simply put, as stablecoins become deeply integrated into foreign exchange markets, their influence will surge, bringing new policy challenges.

Contradictions are emerging: local fiat stablecoins can maintain the on-chain monetary sovereignty; bank access brings crypto firms into the regulatory fold; merchant payments push crypto beyond investment into everyday settlement. But each new channel also raises higher demands for reserve management, redemption mechanisms, AML, market manipulation controls, and exchange rate risk management.

The current landscape is clearly divided. US ETFs and Wall Street’s involvement have turned crypto into a financial investment product, lowering barriers for asset allocation; but the more difficult, core test of widespread adoption is still unfolding under regulatory guidance: whether crypto can truly connect with local fiat, bank accounts, merchant transactions, and foreign exchange markets.

All remains in early stages. BILS awaits official issuance and user deployment; Pakistan waits for licensed institutions to fully connect with banks; Hong Kong’s new licenses await operational launch; Japan, the UK, and the EU await regulatory rules tested under extreme market conditions; the UAE needs to refine issuance and registration rules; South Korea needs merchant payment volumes to reach real transaction scales.

If these pilots succeed, the global crypto landscape will no longer be dominated by US-led investment cycles but will evolve into regional financial ecosystems where local regulators absorb and integrate crypto assets. If not, the US dollar and American capital markets will continue to lead the industry’s trajectory.

The next real contest will not be market hype but actual usage.