Sidley Blockchain Bulletin - 2026 Business, Legal and Regulatory Outlook

Blockchain technology and asset tokenization are moving beyond proof-of-concept use cases to production-scale systems, requiring businesses and regulators to confront questions that are no longer theoretical. As institutional adoption expands and rulemaking, enforcement, and litigation accelerate across jurisdictions, the legal consequences of how these technologies are structured, deployed, and governed have become more immediate and more complex.

Looking ahead to 2026, Sidley’s global multidisciplinary blockchain team has drawn on its regulatory, transactional, and disputes experience to assess how these trends are likely to evolve. In this Blockchain Bulletin feature, we set out our top 10 predictions for the developments that will most influence blockchain and digital asset activity in the year ahead.

Capital Markets, Investment Opportunities, and Institutional Adoption

1. Tokenized assets will move beyond the pilot stage and become a capital markets and investment fund distribution strategy.

WHY? 2026 starts with pro-innovation leadership in place at all the major U.S. financial regulators. With a green light from regulators, the potential benefits from distributed ledger technology will finally be tested at scale.¹

2. Opportunities for exposure to digital asset investments will continue to proliferate, and allocation questions will become more nuanced than a simple yes or no.

WHY? Regulatory changes in 2025 made it easier for investment products to come to market, including exchange-traded products with direct exposure to crypto assets and digital commodity derivatives contracts. While the trend of digital asset treasury companies has slowed, exposure to digital assets in public markets will quietly continue to increase as the technology is integrated into mainstream applications.²

3. Tokenization of real-world assets (RWAs) will become a viable distribution tool for illiquid assets without disintermediating traditional finance.

WHY? Tokenized RWAs increasingly sit inside familiar legal and financial structures — special-purpose vehicles, credit facilities, securitizations, and fund vehicles — rather than replace them. Assets that generate predictable revenues but suffer from fragmented or illiquid secondary markets are well suited to tokenization. Institutions will selectively incorporate tokenized RWAs to improve collateral mobility, fractional participation, and settlement efficiency, not to bypass existing gatekeepers.³

4. Commercial law clarity will accelerate the use of digital assets as collateral.

WHY? As amendments to the Uniform Commercial Code take effect across a majority of U.S. states, including New York’s recent adoption of Article 12 governing controllable electronic records, digital assets are increasingly being treated as usable collateral under established commercial law principles. These changes provide greater clarity around how security interests in digital asset collateral — including margin — can be created, perfected, and enforced, reducing legal uncertainty for lenders, intermediaries, and market participants.⁴

Corporate Strategy, M&A, and Business Transformation

5. Institutions will recognize that legacy business, corporate, and fundraising models are under serious threat and the pace of change will continue to accelerate.

WHY? A paradigm shift is underway, affecting everything from financial and data privacy to operational infrastructure to corporate domicile choices. As assumptions are questioned, decisions across the board are being reexamined. Trailblazing institutions are already in motion, and those that remain on the sidelines will need to play catch-up.⁵

6. M&A activity will continue to trend upward as industry leaders and legacy players consolidate.

WHY? The significant market consolidation from 2025 is expected to continue into 2026. As adoption accelerates, companies looking to grow or expand into blockchain technology will increasingly choose to buy rather than build. Proven technologies, established teams, and existing distribution will command a premium as network effects make scale and speed decisive, particularly as companies seek to offer both horizontally and vertically integrated products and services.

7. While financial-use cases have generated the most attention, tokenized assets used as operational tools for rights, access, and verification will meaningfully change how businesses interact with users.

WHY? Businesses and regulators increasingly recognize that many tokens are not financial instruments, enabling broader adoption of blockchain for nonfinancial, operational-use cases.⁶ For example, in consumer products, tokens can authenticate goods, manage warranties, and enable loyalty and resale programs. In real estate, they can govern access rights, leasing, title records, and building services. In healthcare, tokens can support identity verification, consent management, credentialing, and secure data access. In sports and entertainment, tokens can power ticketing, fan access, digital collectibles, and licensing. Together, these applications enable more efficient, transparent, and programmable relationships between organizations and end users.

Global Regulatory Change, Infrastructure Developments, and Disputes

8. The most significant implementations of blockchain technology will take place behind the scenes with minimal change to user experiences.

WHY? End users do not necessarily want new products; they want existing products to work better. Companies are increasingly recognizing blockchain as infrastructure rather than as a consumer-facing product — particularly for securities market structure and payments applications. Banks, payment networks, and fintech platforms will increasingly route settlement and treasury flows over public blockchains as acceptance of tokenized securities and stablecoins continues to grow.⁷

9. As regulations in key jurisdictions begin to crystallize, companies must become increasingly strategic in navigating cross-border activity.

WHY? Crypto markets have always been global, and regulatory frameworks are now catching up — but often unevenly. Differences in regulatory approaches, standards, and enforcement will matter as much as the rules themselves. Companies will need to look beyond single-jurisdiction compliance and carefully assess cross-border legal risk as they operate and scale globally.⁸

10. Disputes are inevitable, but they will now come from a wider range of sources.

WHY? While federal regulators take a more permissive view toward innovation, the next wave of potentially precedent-defining crypto litigation will be driven by the private sector. State regulators will continue to aggressively assert jurisdiction over digital asset products.⁹

For continuing developments, be sure to bookmark the Sidley Blockchain Legal Launch Pad.

 Knowledge Management Lawyer Daniel Engoren contributed to this Sidley Update.

¹ See, e.g., past Sidley Updates: SEC Issues Further Crypto Asset Security Guidance, Addresses Broker-Dealer Physical Possession and Asset Pairs Trading (Dec. 23, 2025), The Depository Trust Company Gets SEC OK to Tokenize Securities and Skip Key Regulations (Dec. 17, 2025), Breaking Down “Project Crypto”: SEC Chairman Atkins Outlines Next Phase of Digital Asset Oversight (Nov. 17, 2025), SEC Staff Issues No-Action Relief Permitting Use of State-Chartered Trust Companies as Qualified Custodians of Digital Assets (Oct. 3, 2025).

² See, e.g., CFTC Announces First-Ever Listed Spot Crypto Trading on U.S. Regulated Exchanges (Dec. 4, 2025), IRS Revenue Procedure 2025-31 (Nov. 10, 2025), SEC Approves Generic Listing Standards for Commodity-Based Trust Shares (Sept. 17, 2025), SEC Staff Statement on Crypto Asset Exchange-Traded Products (Jul. 1, 2025).

³ See Sidley and Owl Explains: A Primer: Understanding Tokenized Real-World Assets (Dec. 9, 2024). See also CFTC Launches Digital Assets Pilot Program for Tokenized Collateral in Derivatives Markets (Dec. 8, 2025), IOSCO Final Report, Tokenization of Financial Assets (Nov. 2025).

⁴ See, e.g., Uniform Law Commission. See also our previous Blockchain Bulletin – UCC Minute: Leveraging Recent Changes in Commercial Law for Digital Assets (Apr. 9, 2025). The amendments in New York become effective June 3, 2026.

⁵ See Sidley article The GENIUS Act: A Framework for U.S. Stablecoin Issuance (Nov. 2025). See also, e.g., President’s Working Group on Digital Asset Markets, Strengthening American Leadership in Digital Financial Technology (Jul. 30, 2025).

⁶ See, e.g., SEC staff statements on Meme Coins (Feb. 27, 2025), PoW Mining Activities (Mar. 20, 2025), Protocol Staking Activities (May 29, 2025).

⁷ See Sidley Updates: The State of Play in Banking and Digital Assets: Welcome Developments From the Banking Agencies (Jan. 9, 2025), U.S. FDIC Proposes Rule Governing Bank Subsidiary Issuance of Payment Stablecoins Under GENIUS Act (Dec. 22, 2025). See also Sidley Updates at footnote 1.

⁸ See, e.g. Sidley Updates: Hong Kong to Further Enhance Licensing Regime for Virtual Assets to Cover Advisors and Managers (Jan. 7, 2026), UK/EU Investment Management Update (Jan. 6 2026).

⁹ See, e.g., Sidley Securities Regulatory Compliance and Enforcement on LinkedIn, “Meme Coin” Case Heads to Trial (Dec. 5, 2025), Sidley Update: State Securities Regulators Stake a Claim in Crypto Asset Markets (Aug. 14, 2025).