The key to cryptocurrency adoption in 2026: not in the United States but in emerging markets. Israel and Pakistan have already started to show results.

Digital assets are shifting from simple investment tools toward deep integration with domestic financial infrastructure. Across the world, countries are testing cryptocurrencies’ real-world deployment in payments, settlements, and the banking system—through regulation and technical trials.

Compared with the buzz of the U.S. crypto market, Israel and Pakistan staged a quieter yet far more meaningful test this month. The truly critical industry turning point of 2026 may be happening precisely where digital assets and domestic currencies, as well as banking systems, are deeply integrated.

Israeli crypto firm Bits of Gold announced that after two years of pilot testing, the Israel Capital Markets Authority has approved the issuance and circulation of a stablecoin pegged to the shekel, BILS. Just days ago, the State Bank of Pakistan issued Circular No. 10 of 2026, formally repealing the virtual currency ban that had been in place since 2018.

Pakistan’s new rules are explicit: under a compliant regulatory framework, licensed virtual asset service providers (VASP) and approved operating entities may open bank accounts.

These two moves are not on the same dimension as the U.S. spot ETF frenzy, but they point to the underlying logic that will determine the future of the crypto industry: whether cryptocurrencies can transcend their identity as mere investment tools and truly become part of mainstream financial infrastructure.

The U.S. has provided regulatory endorsement and liquidity, sparking the struggle over digital dollar influence. Meanwhile, other countries and regions are testing a different set of foundational capabilities: whether crypto can seamlessly connect with domestic fiat currencies, bank accounts, and merchant payment settlement—and whether it can build market regulatory rules that are truly deployable and enforceable.

Perhaps we need to redefine the standards by which global crypto adoption is judged. Bitcoin ETFs only give investors an additional asset allocation channel. In contrast, a compliant domestic fiat stablecoin that is stable can allow users to hold their national fiat currency directly on-chain.

When central banks allow compliant crypto institutions to open accounts, they build the bridge that connects the industry to the formal banking system. ETFs only recognize cryptocurrencies’ asset-class status; it is domestic stablecoins and bank access that truly test whether crypto can evolve into usable, end-to-end financial infrastructure for the public.

Everything is still at the early pilot stage. BILS still needs to complete formal issuance and real-world usage; Pakistan still needs to cultivate licensed service providers and establish stable banking partnerships. Other regions are also pushing forward: Hong Kong’s newly licensed stablecoin issuers are waiting for official business launch; the UAE, South Korea, Japan, the UK, and the EU are rolling out different components of a comprehensive crypto adoption system—covering payment-type tokens, merchant cash register and settlement, market-behavior regulation, admission licenses, risk-control compliance rules, and more.

The UAE still needs to clarify the corresponding relationship between the issuance of the dirham token and central bank filings. But the trend is becoming increasingly clear: in 2026, the real-world deployment focus of the crypto industry will increasingly concentrate on the deep integration of digital assets with fiat currencies, banks, merchants, and clearing/settlement systems.

Domestic legal tender and banking services

Bits of Gold said the approved BILS will initially be issued on Solana, and pilot partners include Fireblocks, QEDIT, Ernst & Young, and the Solana Foundation.

The biggest policy significance is bringing domestic fiat onto the blockchain. BILS introduces a shekel-pegged stablecoin into a chain market still dominated by U.S.-dollar stablecoins, and raises a question: can a country’s currency obtain a programmable version without handing the entire payment layer over to dollar tokens?

Behind this is a contest over monetary sovereignty. U.S. dollar stablecoins have become the main settlement medium in crypto markets. Once the shekel stablecoin is successfully issued and becomes widespread, Israel can build a national-currency payment channel on the same chain-infrastructure within the same stack. Its value does not lie in market hype, but in whether wallets, exchanges, payment institutions, and compliant institutions are willing to actively connect and use it over the long term.

Pakistan, meanwhile, has filled a key missing link by connecting to banks. The State Bank of Pakistan’s new regulation replaces the old 2018 ban and allows institutions supervised by the central bank to open bank accounts for licensed virtual asset companies and their users. At the same time, it requires that all bank access meet risk-control reviews, data filing requirements, fund monitoring, and user risk screening, and that it strictly comply with the country’s virtual asset regulatory framework.

This has fundamentally changed the operating environment for licensed crypto institutions. Bank accounts are the most basic underlying infrastructure of the financial system, directly determining whether compliant institutions can custody customer funds, complete fund reconciliations, fulfill due diligence obligations, and bring transactions into a regulatory monitoring and oversight system.

In Pakistan, where on-chain crypto adoption has long ranked among the highest globally, bank access will decide whether the industry remains in informal, non-institutional circulation—or advances into a traceable, institutionalized stage of legitimate development.

Hong Kong is also following a licensing-first, then deployment approach. On April 10, the HKMA issued stablecoin issuance licenses to two institutions: Anto Financial and HSBC Hong Kong. The licenses took effect on the same day. This symbolizes Hong Kong moving from policy planning into the deployment stage for licensed institutions, though further waiting is still needed for the official launch of services and broad market adoption.

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

Image source: CryptoSlate

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

Regulatory rules are becoming the new financial infrastructure

Even the regulatory framework itself is evolving into underlying industry infrastructure.

The Japanese Financial Services Agency plans to upgrade crypto asset regulation from the Payment Services Act to the Financial Instruments and Exchange Act, strengthening information disclosure, institutional risk controls, market manipulation oversight, restrictions on insider trading, regulatory authority, and user protection mechanisms. This means crypto assets will be brought under a strict financial regulatory system, with eligibility tied to behavioral compliance, ongoing supervision, and accountability.

This also confirms that the design of regulation itself is a form of underlying infrastructure. The market relies on regulations to define access permissions, asset custody qualifications, marketing boundaries, and legal responsibilities for trading activities.

The UK is also steadily building its regulatory system. From September 30, 2026, to February 28, 2027, applications for new crypto business licenses will be open. The new rules will officially take effect on October 25, 2027. At the same time, progress will be made on implementing licensing and ongoing supervision, protecting consumers’ rights, asset custody, prudent operations, and market anti-manipulation details.

The EU’s MiCA law has been fully implemented, establishing a unified crypto rules system that covers information transparency, mandatory disclosures, institutional access, daily supervision, consumer protection, market integrity, and financial stability.

Global regulation is no longer the effort of a single country—it is being jointly advanced across multiple regions. The biggest change in 2026 is that regulatory rules will begin to directly determine whether crypto products can enter mainstream, formal financial channels.

The UAE has introduced a payment token regulatory framework, and the central bank publishes a list of licensed institutions. At the same time, multiple financial institutions have been approved to issue dirham stablecoins (DDSC) for institutional payments, clearing, liquidity pool management, and cross-border trade settlement. Currently, deployment is limited to institutional scenarios, and large-scale retail adoption still needs later verification.

South Korea has also completed the merchant payment segment. In March, Crypto.com partnered with KG Inicis to connect crypto payments to a vast merchant network, serving overseas tourists and local e-commerce users. Merchants can choose to receive fiat or digital-asset settlement. South Korea’s K Bank also partnered with Ripple to test cross-border payments, exploring integration models between the banking system and crypto payment channels. The core value of these efforts is to extend crypto applications beyond investment into real scenarios such as cashier settlement, cross-border remittances, and everyday consumption.

Deployment is the ultimate test

Image source: CryptoSlate

The U.S.-centered narrative remains dominant, and for good reason—its scale is large enough. As of April 29, total crypto market capitalization is close to $2.59 trillion, with Bitcoin’s market cap around $1.56 trillion. U.S.-dollar stablecoins continue to dominate market liquidity: USDT’s 24-hour trading volume is about $111.5 billion, and USDC is about $47.8 billion.

That massive scale ensures that U.S. policy and the dollar settlement system always remain at the center of global attention. The stablecoin contest behind the CLARITY Act is, at its core, a fight for economic dominance over the digital dollar. Dollar liquidity is still the core pillar of global crypto infrastructure—there is no substitute.

But real usage data is rewriting the yardsticks. Chainalysis data shows that in 2025, the global stablecoin real-world economic circulation reached $28 trillion, projected to rise to $719 trillion by 2035, and in an optimistic scenario may approach $1,500 trillion. While such projections come from model simulations, they indicate a clear trend: the value of stablecoins has expanded from trading margin guarantees to three core scenarios—payment infrastructure, corporate treasury pools, and cross-border clearing.

Emerging markets are at the center of this transformation. Chainalysis’s global crypto adoption ranking shows India at the top, followed by the US, Pakistan, Vietnam, and Brazil—coverage across all income levels. The key to sustained real-world adoption lies in deposit channels, regulatory clarity, and the maturity of financial and digital infrastructure. That is precisely the core proposition being tested by Pakistan’s bank access and Israel’s domestic stablecoins.

The IMF has also pointed out risks: cross-border stablecoin flows can affect exchange-rate deviations, local currency depreciation, dollar premiums, and overall financial stability. In simple terms, when stablecoins become deeply integrated into the foreign-exchange market, their influence will jump significantly—and so will the emergence of brand-new policy contests.

The contradictions become visible at the same time. Domestic fiat stablecoins can maintain a country’s position in on-chain financial activities. Bank access brings crypto institutions into the regulatory system. Merchant payment integration lets cryptocurrencies step out of their investment-only identity and move into everyday settlement. But each new channel also raises higher requirements for reserve supervision, redemption mechanisms, anti-money-laundering, market manipulation, and exchange-rate risk controls.

The current landscape has already split clearly. U.S. ETFs and Wall Street’s entry have completed the financial investment of cryptocurrencies, lowering the barrier for mainstream asset allocation. But the truly harder, more core adoption exam is now underway in cities and countries driven by regulators: whether crypto can truly connect with domestic fiat currencies, bank accounts, merchant consumption, and the foreign-exchange market.

Everything is still early. BILS is waiting for formal issuance and user deployment; Pakistan is waiting for licensed institutions to truly connect to the banking system; Hong Kong’s new license holders are waiting for services to launch; Japan, the UK, and the EU are waiting for regulatory rules to be tested in extreme market conditions; the UAE needs to refine the rules that match issuance and filings; South Korea needs merchant payments to break out into real transaction scale.

If these pilots all run successfully, the global crypto landscape will no longer be a U.S.-led investment-product cycle. Instead, it will become regional financial ecosystems under local regulatory frameworks—where regions absorb and integrate crypto assets on their own. If the pilots fall short of expectations, the dollar and U.S. capital markets will continue to dominate the industry’s direction.

The next round of real competition won’t be about market hype, but about real-world usage rates.

• This article is reprinted with permission from: 《Foresight News》
• Original title: 《Israel and Pakistan show crypto’s next growth phase is likely to be outside the US》
• Original author: Liam ‘Akiba’ Wright, CryptoSlate
• Translation: Chopper, Foresight News