Franklin Templeton: Crypto Growth in 2025 Hinges on Regulation, AI

• Franklin Templeton forecasts 2025 as a transformative year for crypto.
• It believes regulatory advancements and institutional engagement will drive this.
• The firm predicts stablecoin regulation and tokenized securities will enable diversified investment products.

Franklin Templeton’s 2025 crypto outlook points to a transformative year shaped by regulatory clarity, growing institutional interest, and advancements in technology. The report brings out the importance of stablecoin regulations and AI applications in connecting traditional finance with decentralized systems. 

Bitcoin is also expected to strengthen its role as a global reserve asset by 2025, driven by increased government and institutional adoption.

Regulatory Clarity: A Catalyst for Crypto Growth

First, the outlook stresses the critical role of U.S. regulators, particularly the Securities and Exchange Commission (SEC), in shaping the crypto market. 

Franklin Templeton expects regulatory frameworks for stablecoins and tokenized securities to emerge, enabling the launch of diverse investment products like ETFs. The asset manager believes favorable regulation will make the U.S. a major center for crypto innovation.

Franklin sees stablecoin regulation as a game-changer that will allow large financial institutions to issue stablecoins. This, they believe, will connect traditional finance (TradFi) and decentralized finance (DeFi). Increased use of tokenized products and stablecoins is predicted to fuel significant growth in DeFi worldwide.

The report also predicts that Bitcoin will strengthen its position as a global financial asset and a digital store of value. Government and institutional adoption will be key. Franklin expects several countries to add Bitcoin to their reserves by 2025.

AI and Blockchain Convergence

Technological progress, especially the combination of artificial intelligence (AI) and blockchain, will shape 2025. Franklin Templeton envisions AI agents using blockchain for on-chain transactions, portfolio management, and the merging of digital content with decentralized systems.

Similarly, decentralized physical infrastructure networks (DePIN) are expected to gain traction as industries like logistics and the Internet of Things (IoT) seek efficient, decentralized solutions. These networks will be essential in linking real-world applications with blockchain technology.

Ultimately, Franklin Templeton believes 2025 will transition toward utility as crypto technologies become integral to global finance and operations. It urged stakeholders to monitor regulatory developments, institutional strategies, and the AI-crypto landscape to navigate this dynamic year effectively.