Why 2026 May Be Blockchain’s Maturity Test, Not Its Breakout Year

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Few sectors may have as much to look forward to in 2026 as blockchain does.

This year, five predictions dominate the digital asset conversation, including digital assets becoming a standard part of institutional portfolios; tokenization of real-world assets finally breaking through; decentralized finance going enterprise; governments reclaiming ground through central bank digital currencies (CBDCs) and regulated digital money; and regulatory clarity moving from the headline to shaping winners and losers.

Taken together, these claims sound bold, even familiar. However, a more useful way to read the outlook for 2026 is not as a checklist of declarations, but as a stress test for the industry’s maturation. That’s how PYMNTS CEO Karen Webster framed the year ahead in a conversation with Citi’s Ryan Rugg on Episode 3 of the “From the Block” podcast.

Rather than adding to the prediction pile, Webster and Rugg, Citi’s global head of digital assets for Citi Treasury and Trade Solutions (TTS), dissected the assumptions beneath the forecasts, applying context, skepticism and cautious optimism.

The defining question for 2026 is not whether blockchain technology is viable, but which of the long-held assumptions about its adoption, regulation and financial plumbing can survive contact with the operational realities of banks, asset managers and corporate treasuries, they suggested.

Institutional Adoption Moves From ‘Should We?’ to ‘How Much?’

As hype cycles give way to systems thinking, blockchain is increasingly framed not as a speculative disruptor but as infrastructure, something that lives inside portfolios, workflows and balance sheets. Institutional adoption is no longer hypothetical. The real question is scale.

“I think that we’re at an inflection point right now,” Rugg said. “What I do think is we start to see a shift in the conversation, not should we, but how much?”

Today, institutional allocations to digital assets tend to hover around 1% to 2%. That number may not surge dramatically in 2026, but what’s changing is the tone of the dialogue. Infrastructure is maturing. Custody frameworks are clearer. Risk models, accounting treatment and internal approvals are becoming normalized.

Asked by Webster whether this normalization implies growth in exposure or simply broader participation at modest levels, Rugg leaned toward the latter.

“It’s not just the hoodies anymore,” she said. “The suits and ties have arrived.”

Still, the level of allocation remains cautious. Until regulatory frameworks mature further, digital assets will be present but likely not predominant in most institutional strategies.

Tokenization’s Breakthrough Depends on Cash, Not Code

The same tension between promise and readiness defines the long-running prediction that tokenization of real-world assets will finally scale. Tokenized bonds, private credit and real estate have been discussed for years, often trapped in pilot programs that never quite make it to production.

“What was missing in the past was cash on chain,” Rugg said.

That gap is now narrowing as stablecoins and tokenized deposits enable assets and settlement to live on the same rails. True delivery-versus-payment and near-instant settlement are now technically feasible.

But feasibility does not equal simplicity. Webster pointed to the critical bottleneck of enterprise readiness. Real-time settlement faces challenges due to decades of batch-based processes embedded in treasury systems, ERPs and internal controls.

Rugg said she expects adoption to begin with simpler instruments. Tokenized money market funds sit just above cash on the complexity curve and benefit from familiarity among asset managers and treasurers. More complex assets will follow slowly.

Asset managers may be moving ahead, but corporate adoption will hinge on retooling systems built for end-of-day reconciliation, not always-on liquidity. In that sense, tokenization’s breakthrough is less about blockchain capability than about organizational change.

Why DeFi Won’t Go Enterprise Overnight

That realism extends to the prediction that decentralized finance will go enterprise. Rugg said she is skeptical that permissionless DeFi protocols, in their purest form, will be embraced by highly regulated institutions anytime soon.

Blockchain-based finance is not a rebrand, but a re-architecture, she said. Moving from batch processing to 24/7 networks represents a fundamental shift in financial plumbing. In safety-and-soundness-driven industries, that kind of change rarely happens without regulatory guardrails.

Enterprise adoption, then, is more likely to take the form of permissioned systems, controlled access and regulated environments that borrow selectively from DeFi’s mechanics rather than its ideology.

Regulation Takes Center Stage

What is clear for 2026 is that regulation itself is shifting from fear to foundation. The conversation is moving away from enforcement headlines and toward sustainability. Who can operate profitably, safely and at scale under new policy rules?

“I think regulation is going to become a framework, not just the backdrop,” Rugg said.

Webster drew parallels to FinTech’s earlier evolution, where companies that invested early in compliance often emerged stronger. Regulation, in that sense, becomes a competitive filter.

“You’ll see licensed entities succeed, while unlicensed exchanges struggle,” Rugg said, adding that absorbing compliance costs while maintaining viable margins will separate winners from the rest.

Still, government-issued CBDCs may be one blockchain prediction that is teetering on the edge of losing momentum, particularly as private-sector stablecoins advance.

“It’s been very quiet,” Rugg said. “Stablecoins have kind of taken over the narrative.”

Much of the original CBDC push stemmed from fears of losing monetary control to private issuers or Big Tech, as well as the limitations of aging infrastructure.

“Most central banks were built for batch settlement,” Rugg said. “They weren’t designed to be 24/7.”

Whether CBDCs meaningfully reemerge in 2026 remains uncertain.

The Least Dramatic Prediction May Be the Most Accurate

In the end, the most credible forecast for 2026 is also the least dramatic. Rugg said she expects a shift in mindset more than market share. Digital assets will increasingly enter the “normal dialogue,” no longer treated as exotic experiments but as tools reshaping finance incrementally.

Like the early internet, blockchain won’t replace existing systems overnight. It will reshape them quietly and unevenly until its presence feels ordinary.

“The reality is going to be messy—uneven adoption, fragmented regulation and lots of trial and error,” Rugg said. “But it won’t feel like an outlier anymore.”

After all, the technology is here. It’s the integration, the business model, regulation and risk, as Webster said, that still needs to catch up.

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