The offering, named “Schwab Crypto,” will be operated through Charles Schwab Premier Bank. The implementation model will also see the venture taking a different path than its prior crypto exposure model, which routed clients through ETFs, futures, and crypto-adjacent equities.

Charles Schwab rolling out direct Bitcoin and Ethereum crypto trading to its brokerage client base will also test whether direct digital asset ownership can integrate into the digital workflow of a mainstream brokerage platform at scale, and whether it will generate the kind of demand signal that will reshape competitive dynamics across the retail brokerage industry.

“Qualifying clients will access direct BTC and ETH trading through a dedicated account tied to the firm’s affiliated banking subsidiary, a structural boundary that separates crypto holdings from the stocks, bonds, and ETFs clients already hold under SIPC coverage. Crypto assets held through the new product carry neither SIPC nor FDIC protection, a disclosure Schwab is making explicit in its rollout materials,” Coinspeaker reported.

“The initial cohort is narrow by design. The pilot begins with Schwab employees, followed by a small early-access group drawn from a waitlist currently open on Schwab’s crypto page, before broadening through the remainder of the first half of 2026. Geographic restrictions apply at launch: the product is available across all US states except New York and Louisiana. Asset scope is limited to Bitcoin and Ethereum only, with no additional cryptocurrencies announced,” it added.

However, Schwab currently accepts no external crypto deposits and does not support withdrawals to self-custody wallets, staking, recurring purchases, or limit orders, features that separate native crypto platforms from their brokerage-integrated counterparts. The company also hasn’t discussed things like pricing and fee structure either. The pilot product currently resembles a basic buy-and-sell interface.

However, as per the reports, Schwab is not looking to compete with Coinbase on feature depth. It is testing whether the mere availability of direct ownership, inside a familiar brokerage interface, generates measurable demand from the company’s client base.

The post Charles Schwab rolls out Bitcoin and Ethereum trading on brokerage platform appeared first on International Finance.

Bitcoin (BTC) saw a brutal sell-off in early 2026 as it plunged from a peak of $126,000 to below $63,000. This has led people to try deciphering the market realities, as the crash exposed the cracks in the mythology of Bitcoin as an ever-booming asset.

Most analysts believe it was a new financial era. The digital asset broke the six-figure threshold in late 2024, and by early 2025, it was seen as the most coveted asset in this new financial landscape. The spot exchange-traded funds (ETFs) brought Wall Street money into the crypto market, and the Trump administration, which was initially hostile to cryptocurrencies, became incredibly friendly.

Of course, there was also the halving cycle. Bitcoin’s four-yearly supply shock was as punctual as always. By October 2025, the price touched $126,000, and the faithful acolytes and crypto billionaires were already mapping $200,000 and beyond.

Then the bottom fell out. Prices have been slashed in half from their October peak, with the price plunging way below the $63,000 mark in February 2026 for a staggering fall of around 50% in just four months. This crash has caused significant panic in the market as billions of dollars disappeared over a handful of sessions, and many leveraged traders were flushed out. Furthermore, the Spot ETF, which was intended to legitimise the cryptocurrency as a stable asset, instead forced sellers to mechanically dump coins in a market that was already collapsing.

Yes, it was a bloody season, even by crypto’s permissive standards, but this article is not about how bad it was, but what it reveals. Is crypto the new digital gold, or is it just a speculative asset with institutional backing?

Modern crypto crash

Bitcoin has come a long way from being one of the riskiest assets in the world. It has slowly garnered a reputation as something that will keep increasing in value.

To understand this sell-off and why it hit so hard, we need to look at how the market was built over the last two years and examine the structures that drove the last rally and its inevitable collapse.

Firstly, let’s examine leverage. The crypto derivatives market is a paradise for aggressive traders, and the latest cycle drew hordes of them. When the digital currency eroded from its $80,000 to $90,000 range in early February, the markets saw almost $279 million in leveraged positions liquidated within a single day. Almost $170 million of that was concentrated in long positions.

Just a few days later, within a single hour, $80 million in liquidations were produced, and $48 million of it was Bitcoin alone.

While the data is not record-breaking or particularly alarming in isolation, it remains significant due to the feedback loops and self-fulfilling prophecies it creates.

Academic research specifically examining Bitcoin futures markets at BitMEX revealed that daily forced liquidations average approximately 3.5% of open interest for long positions, largely because many traders utilise effective leverage levels of 60x or more. In an environment like that, even a moderate price decline leads to those margin calls. Exchanges then dump collateral to cover those calls, and the prices dwindle further, liquidating more positions. This cascade is fast, mechanical, and transforms something that is otherwise manageable into a rout.

But we can’t blame everything on leverage. It was just an amplifier and not what started this domino effect. The foundational reasons for this crash were a structural shift in the behaviour of a new and yet consequential set of players. Namely, the ETF complex.

New buyers become sellers

Experts say that the US spot Bitcoin ETF launch was a watershed moment. It allowed retail and institutional investors to access the digital currency through a regulated, familiar vehicle without managing balances or private keys for the first time.

Within the first two trading days of 2026, $1.2 billion in net inflows were recorded on US ETFs. It is an extraordinary pace, which reassured investors that the historic run of 2024 and 2025 probably might not end anytime soon.

Then the rhythm broke. The shockwaves emerged with ETF flows flipping negative by January 6. Research by Binance reported that, in 2026, demand had turned into a net negative, with year-to-date flows of roughly minus 4,595 BTC. This meant that the funds, on balance, were being sold into the market rather than bought.

A separate analysis claimed US spot Bitcoin ETFs recorded $4.5 billion in net outflows in 2026, which was the longest sustained outflow streak since early 2025.

It’s different this time around because in previous cycles, after every halving, retail enthusiasm fades, and the tourist capital is usually invested in offshore derivatives or speculative altcoins. This is referred to as altseason.

Most traders who make big money during the sell-off re-divert that wealth into up-and-coming coins. But this season, there was no altseason rally. The cryptocurrency kept booming indefinitely. There was even talk that an altcoin season might not happen again.

ETFs have changed the equation. When investors redeem ETF shares, the fund must sell underlying altcoins to meet these demands. It is programmed that way and is non-discretionary. It happens in large blocks and hits a market which, despite its growth, has relatively thin spot liquidity compared to traditional assets.

The ETF paradox is visible. The institutionalisation of BTC was supposed to stabilise the asset and broaden the ownership base. Instead, it created a new system where retail fear can rapidly and efficiently transmit into largescale spot selling. This legitimisation was celebrated by bulls, yet that same mechanism has handed a button for self-annihilation to the market.

The macro context

And to top it all off, the macroeconomy couldn’t be more hostile to Bitcoin. The wars in Europe, Israel and possible geopolitical crises in Taiwan and Iran, along with the tariff wars, have killed the appetite of central banks around the world. Markets have been tightening and de-risking globally.

The same fears that cause volatility in traditional markets are more profound now. Gold has surged above $5,500 per ounce, serving as a safe haven for assets as it has for thousands of years. Meanwhile, the digital asset (which was supposed to be a storehouse of wealth and was dubbed the ‘digital gold’) has fallen roughly 20% year-todate as of early February. It is a development that is impossible to miss.

The whole idea of the blockchain asset was ‘gold but better’ because someone could steal your gold from your house, banks might collapse, and gold is harder to transport from one country to another. It also had all the good properties of gold in the sense that no one could take it from you. It was in a hidden, encrypted wallet that the government had no access to, and the prices always kept booming.

It was considered a reliable and safe asset, but the global crisis has proven that the digital currency might not be as reliable an asset as people thought it was, and is definitely not a dependable replacement for gold.

The policies that have been baked in place by governments around the world are not conducive either. Since COVID-19, near-zero rates, and quantitative easing, banks have made a coordinated retreat from their usual yet extraordinary monetary accommodation.

The US Federal Reserve drained $2.8 trillion from its balance sheet between the pandemic peak and late 2025, only taking a slight U-turn in December. The European Central Bank was no different and shed $3 trillion since mid-2022. Even the Bank of Japan (which was a perennial holdout historically) has embraced inflation and is shrinking its own balance sheets.

It’s not all doom and gloom. Some rate cuts are set to return in 2026. However, there has been a generational shift. Real yields are positive, and even cash offers dependable returns. The dollar is firm despite day-to-day volatility. Bitcoin, which had thrived in the era of free money, unprofitable growth companies, and speculative tech, is a natural casualty of this change in philosophy.

The cryptocurrency is correlated with the Nasdaq and other high-beta risk assets (assets with high volatility relative to the market). It is telling of what the asset has evolved into, which is a macro trading instrument.

It only rallies when there is abundant liquidity and a great appetite for risk, and is dumped the moment traders have cold feet.

The digital gold question

Now let’s get to the heart of the matter. In a world of uncertainty, war, fatigue, plague, and zero-sum games, gold seems like the most reliable asset to hold on to. Everyone wants it, and no culture would deny it.

The digital gold thesis is underpinned by two important claims, the first being that Bitcoin acts as a store of value that builds and retains purchasing power across full cycles despite its inherent volatility. And the second claim suggests that during a crisis, the cryptocurrency behaves like gold, and serves as an effective hedge against both monetary debasement and geopolitical uncertainty.

“Bitcoin is sensitive to liquidity. In phases when capital becomes cautious, BTC often behaves not like a protective shield, but like a real risk asset,” according to the views of analysts on the website of Aequifin, a Germany-based fintech platform for litigation funding.

There are no arguments about the first claim. The digital asset has proven its resilience across years, seeing highs and lows but coming back up every halving cycle. Previously, it had lost 70% to 80% of its value, yet it has soared to new heights every time. Long-term holders have been rewarded in a way that no other asset has rewarded its holders.

Research on post-halving dynamics has confirmed that speculative cycle and supply shock patterns are broadly intact.

It is when it comes to the second claim (the idea of the cryptocurrency as a go-to asset during a crisis) that things get murky.

Research across multiple methodologies, including VAR models, GARCH analysis, and multi-factor frameworks, has concluded that BTC cannot function as a safe haven akin to gold. Studies examining correlations between the digital currency, gold, oil, and equities indicate that Bitcoin is the second riskiest asset in the sample, and significantly more volatile than gold, making it more comparable to crude oil or leveraged growth stocks than to defensive instruments.

Furthermore, Quantile VAR spillover methods reveal that under normal and bullish conditions, BTC acts as a net transmitter of risk to other assets, while in times of crisis, it amplifies shocks rather than absorbing them, such as gold and treasuries.

The crash of 2026 exposes an uncomfortable reality. The conditions that ought to have been quite attractive, like geopolitical risk, currency uncertainty, and distrust of institutional finance, have not made it soar to new heights. Instead, there has been a 50% depreciation. Gold, however, has reached new heights. It’s not that Bitcoin didn’t rally; it crashed.

Nations that bet big

No one has bet bigger on the digital currency than El Salvador and the Central African Republic. Two nations, continents apart, that granted the blockchain asset full legal tender status. Both nations, as a consequence, have struggled considerably.

El Salvador decided to gamble in September 2021, presenting itself as a visionary. It sounded like a small, dollarised economy was going to leapfrog traditional financial infrastructure to reduce remittance costs and attract crypto- tourists, much like Dubai.

It was going to be a financial laboratory, but the experiment went awry. Research has found that BTC was only used for 1.9% of transactions in the first year. A lot of Salvadorans downloaded the government’s Chivo wallet to collect a one-time $30 incentive, but didn’t open it again.

There were many problems, including technical friction, price volatility, and patchy internet access; consequently, many ordinary citizens saw it as absolutely impractical. However, tourism got a boost, with a rise of 22% in 2024. The digital asset was one of the primary attractions for international visitors, but the macro picture was collapsing. The IMF flagged the legal tender arrangement, citing risks to financial stability, consumer risk, and fiscal integrity.

“El Salvador’s Bitcoin experiment has failed. Public distrust, low adoption, technological problems, and volatility are leading to a rollback of the legal tender policy in 2025,” tweeted Ricardo V. Lago, an independent commentator on Latin American economics, on X in November 2025.

In early 2025, El Salvador sought a $1.4 billion loan from the IMF. One of the conditions laid down by the IMF for loan eligibility was the demotion of Bitcoin and the revocation of its legal tender status. El Salvador received the loan and revoked the legal tender status of the crypto asset. Now, merchants aren’t required to accept the digital currency. The government still has its digital currency holdings, but the experiment has failed. El Salvador is now just another crypto-friendly jurisdiction, not a Bitcoin economy.

The Central African Republic had an even worse crypto journey. CAR adopted the digital asset as legal tender in April 2022, despite having a population where only 11%-14% have internet access.

The government launched a partially Bitcoin-backed national cryptocurrency called Sango Coin, and promised foreign investors citizenship, land rights, and access to natural resources in exchange for token purchases. However, the country’s constitutional court pushed back against selling citizenship via crypto, calling it unconstitutional.

Sango Coin made less than €2 million, which is far short of its target, and collapsed. Researchers who investigated the experiment described the programme as opaque, poorly designed, and constructed for the benefit of speculators and politically connected intermediaries rather than ordinary CAR citizens.

Global Initiative Against Transnational Organised Crime (GI-TOC) stated in its report that the opaque nature of the schemes benefited a small circle of insiders and transnational criminal organisations looking for ways to launder money.

“The CAR regime is effectively trading away the country’s sovereignty at the expense of the wider population,” states the report from the Switzerland-based network of some 600 experts tracking international organised crime.

Both these countries were brave, considering that their economies are on the weaker end of the spectrum. Their experiment might have paid dividends if they had sold the assets during historic highs, but these are nations, and not speculating investors or ‘crypto bros’.

For El Salvador, Bitcoin’s volatility created fiscal and reputational risks that brought about a mild U-turn in policy. In CAR, it added more tension and instability to an already fragile economy.

Liquidity shock or structural red flag?

This crash can be seen in two ways, with the simple reading being that it represents the usual cyclical fluctuations of a speculative asset. Bitcoin has encountered this situation many times before, such as the 2018 crash, where prices fell below 80% and caused significant panic, as well as the 2022 crash, which was almost as severe. The pattern remains consistent every time.

“BTC’s well-known four-year cycle may no longer define its long-term behaviour,” Cathie Wood, CEO of ARK Invest, stated in a Fox Business interview in December 2025. Yet, she acknowledged past cycles featured ‘sharp crashes, often 75% to 90%’, now steadied by institutions.

There is euphoria followed by leverage, a macro or idiosyncratic shock, a cascade of forced selling, capitulation, and an eventual recovery to new heights. From this perspective, the recent violent crash is considered routine, and long-term holders who are habituated to these cycles will likely continue to hold while awaiting new horizons.

The second way to look at it is through the structural lens. What has changed since 2018 and 2022?

The major change is that there are new players in the market. First, ETFs now represent a major share of institutional BTC exposure. Additionally, derivative markets are deeper and more interconnected, and leverage in the system is larger in absolute dollar terms, even if the percentage of open interest remains similar.

The digital asset’s price is now heavily conditioned by the same liquidity plumbing that governs equity markets, including ETF flows, repo conditions, and prime brokerage leverage.

It is no longer bound to slow-moving fundamentals like on-chain adoption or long-term holder accumulation. If you look at it like that, the decentralised financial asset is more like a leveraged Nasdaq constituent than a traditional monetary asset that is separate from the financial system. This may not be permanent. Markets can deepen, ownership will broaden, and volatility could decline, which may shift all these correlations in the future. But, as of now, empirically, we understand that BTC isn’t gold.

So the practical takeaway for investors is that the cryptocurrency isn’t a safe haven or a hedge, but a high-beta, liquidity-sensitive position. It’s more like a tech asset than a gold bar.

It still might boom and reach new all-time highs, but it isn’t an asset that’s stable enough to bet on when the world around you is burning down.

For governments and policymakers, the digital currency narrative might be appealing, but lessons from CAR and El Salvador are humbling. The volatility of BTC is treated as a feature of its immaturity, but it is not dependable enough for long-term public policy. Small economies with very limited fiscal space to operate cannot absorb a 50% drawdown. When the banks come knocking, arithmetic prevails over ideology.

It is not to say the digital currency isn’t appealing. It still is, just as it was 10 years ago. There are several factors that remain remarkable, including its supply constraint, an ongoing adoption curve, and a consistent history of full cycles.

But the 2026 crash has an important lesson to teach us. Cryptocurrency as an asset class has not matured like gold. We are, without a doubt, in an early and volatile chapter of the Bitcoin story.

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But then there is another fear. If these colossal resource extraction specialists hold hands, there would be a historic concentration of market authority over minerals and metals (resources indispensable to modern civilisation) in the hands of a few, who could indirectly have an indispensable opinion in the global economy. And China, being the factory of the world, and because it requires these resources for its industrial engine, would erect the most impenetrable regulatory fortresses to maintain autonomy and global competitiveness.

“China’s antitrust regulator is likely to be concerned ⁠about a ‌combined entity’s concentration in copper production and marketing, as well as iron ore marketing. Beijing may also see an opportunity to force asset sales to friendly entities,” several analysts and lawyers told Reuters.

In fact, well before the Glencore talks were made public, Rio Tinto was exploring an asset-for-equity swap aimed at trimming the ⁠11% holding of its biggest shareholder, state-run Aluminium Corporation of China, known as Chinalco. Rio Tinto’s Simandou iron ore mine in Guinea and Oyu Tolgoi copper mine in Mongolia were reportedly among the assets of interest to Chinalco.

“To get the Glencore deal over the line, assets in Africa are especially likely sales candidates, as Latin America has become less accepting of Chinese investment. China will see this as an opportunity to squeeze out assets,” said Glyn Lawcock, an analyst at Barrenjoey in Sydney.

The Copper Market

This proposed megacorporation would own an overwhelming share of worldwide production across multiple strategic commodities.

Let’s take the copper market. The combined behemoth would control roughly 10% of global mine output, establishing dominance over a metal indispensable to electrical grids and decarbonisation efforts. Iron ore concentration would prove even more striking as the merged group would govern approximately 18% of seaborne iron ore commerce, the essential feedstock for steel manufacturing.

China consumes more copper and iron ore than any nation on Earth. Its regulators scrutinise with profound suspicion any supply consolidation that might grant producers excessive leverage over domestic purchasers. Beijing’s competition authorities have consistently demonstrated scepticism toward mining megamergers that concentrate bargaining power against Chinese industrial interests.

Investors and analysts also see the will to control future copper supply as the prime motivator behind the Glencore-Rio Tinto merger talks.

A premium of 15% to 30% to Glencore’s early January 2026 share price could get the deal done and avoid spurring Australian rival BHP bidding for the company, RBC mining analyst Ben Davis said, citing recent conversations with investors. The move will end up valuing Glencore at up to USD 87 billion.

“Securing copper – not creating near-term value – is the key rationale for the transaction,” Davis stressed.

Glencore’s market capitalisation is about USD 76 billion, while Rio is worth about USD 145 billion. A combined “GlenTinto” would leapfrog BHP as the world’s largest mining company by market value, while significantly boosting Rio Tinto’s long-term copper exposure at a time when electrification-driven demand growth is colliding with a thin project development pipeline across the globe. The deal, if pulled off in January 2026, will be a well-timed one, given the way copper prices set multiple records amid supply disruptions and US trade uncertainties, which are fuelling a sharp rally for base metals.

Rio, which expanded into lithium in 2025 with the USD 6.7 billion acquisition of Arcadium Lithium, expects commodities output to rise about 3% a year by 2030 as new assets such as Guinea’s Simandou iron ore mine and Mongolia’s Oyu Tolgoi copper complex start producing. At this juncture, Glencore’s copper assets will be the real prize for the British-Australian multinational mining company. The assets which Rio may end up acquiring include a 44% share in the Collahuasi copper mine in Chile.

“While Rio has got a lot right in recent years in developing Oyu Tolgoi and Simandou, the growth beyond this current phase is far less exciting with projects (including copper assets like Resolution in the US and Nuevo Cobre in Chile) either too small to make a difference or still in the development phase or stuck in courts,” Davis noted.

Historical Precedents Illuminate The Path

Previous consolidation attempts illuminate Chinese regulatory philosophy with instructive clarity. When BHP mounted its audacious bid for Rio Tinto in 2008, Chinese resistance figured prominently in the deal’s ultimate disintegration. More recently, in 2020, China’s State Administration for Market Regulation torpedoed Glencore’s proposed acquisition of coal assets from Rio Tinto. Officials cited grave concerns about excessive concentration in seaborne coking coal supply chains.

In fact, Glencore has landed in similar situations before. In 2013, Beijing forced the Swiss-based company to sell its stake in the Las Bambas copper mine in Peru, one of the world’s largest, to Chinese investors ‍for nearly USD 6 billion in exchange for the Xstrata takeover. As of January 2026, Glencore has also agreed to sell Chinese customers minimum quantities of copper concentrate at certain prices for just over seven years amid the Xi Jinping government’s growing discomfort over the fact that the Rio Tinto-Glencore joint venture will have too much power over the copper market.

These interventions telegraph that Chinese authorities will dissect the combination with microscopic intensity, particularly given this deal’s potentially seismic ramifications across multiple commodity ecosystems. In fact, as per Reuters, the regulators will also be examining a planned USD 53 billion copper-focused merger between Anglo American and Teck Resources, given the fact that copper assets are in even higher demand today, given the metal’s role in the global economy’s green transition and shift towards artificial intelligence (AI).

Divestment Calculus

To mollify regulatory anxieties, the merged corporation would likely sacrifice substantial holdings, especially in markets where the combined entity would wield disproportionate influence. Industry observers identify iron ore operations in Australia’s Pilbara region as prime divestment candidates. Both companies operate extensive facilities there that feed Chinese steel mills directly.

Copper assets might also face the chopping block, though this scenario presents greater complexity. The metal’s pivotal role in global energy transformation and the copper supply’s relatively dispersed character complicate matters. The merged entity might contend that maintaining integrated copper operations advances broader environmental objectives and energy security imperatives.

Additional divestment possibilities encompass coal holdings, where Glencore maintains considerable operations, plus various base metals or industrial minerals where the companies’ portfolios intersect substantially.

Notwithstanding regulatory obstacles, the merger’s strategic architecture remains intellectually compelling for both enterprises. The combination would unlock operational synergies, compress costs through enhanced scale economies, and position the unified entity to capitalise on surging demand for energy transition metals. The deal would simultaneously furnish the combined company with augmented financial resources to bankroll new mine development and processing infrastructure.

Glencore’s trading division, among the planet’s most sophisticated commodity trading operations, would infuse another critical dimension into Rio Tinto’s predominantly extraction-focused business paradigm. Integrating mining and trading capabilities could generate exceptional value through superior market intelligence and optimised production-sales coordination.

Geopolitical Reverberations

And it’s not just a Chinese thing. There will be even more exhaustive scrutiny in the European Union (EU), the United States and Australia as these countries have formidable watchdogs and antitrust enquiries. But the Chinese verdict remains the most important, as China is ultimately the major destination for mined minerals.

Regulatory outcomes could establish momentous precedents for subsequent mining industry consolidation. A successful transaction, even requiring significant asset sales, might embolden other miners to pursue ambitious combinations. Conversely, regulatory rejection could freeze M&A activity across the sector for years, perhaps decades.

Timing any merger attempt demands exquisite judgment. Current commodity market conditions, with numerous metal prices languishing amid economic uncertainties, might incline regulators toward efficiency-enhancing combinations. Alternatively, mounting concerns about supply security amid escalating geopolitical tensions could prompt authorities toward greater caution regarding strategic commodity supply chain concentration.

As Rio Tinto and Glencore navigate continuing discussions, both must traverse a labyrinthine regulatory landscape with surgical precision. Success demands more than identifying palatable asset divestitures. The companies must construct persuasive arguments demonstrating how their merger serves expansive interests in guaranteeing stable, sustainable commodity provision. This is not going to be an easy battle for these companies.

The post IF Insights: China braces for GlenTinto copper dominance appeared first on International Finance.

As per the credit ratings agency’s report titled “GCC 2026 Energy Outlook: Capex, Capacity, Consolidation,” the main drivers will be capacity expansion plans in the UAE and Qatar, as well as capacity maintenance in Saudi Arabia. However, this level of spending is unlikely to strain the energy giants’ free operating cash flows substantially, even with lower oil prices and a global economic slowdown.

“In the UAE, state-owned energy group ADNOC is targeting a five-million-barrels-per-day increase in production capacity by 2027, while QatarEnergy is expanding its LNG production capacity in phases through its North Field expansion project. We expect capex to taper toward the second half of the decade as the capacity expansion completion dates approach,” the study noted.

Although NOCs’ capex requirements will remain elevated, S&P believes NOCs will adopt a more cautious stance on spending. This will defy the trend among the international oil companies, which, over the past 12-18 months, have generally announced downward revisions to their capex guidance, mainly to balance cash flow generation with their financial policy commitments.

The report further expects that, on average, over half of the GCC-based NOCs’ capex will remain focused on upstream activities, namely exploration and production.

“Domestic oil typically remains the core focus of capex, but the regional NOCs are also increasing their focus on gas and international operations,” the report observed.

In March 2025, XRG, a wholly owned subsidiary of ADNOC, acquired a 10% stake in Area 4 Mozambique for USD 881 million. Similarly, QatarEnergy is actively seeking and securing interests in Africa and South America. As per the ratings agency, these moves by GCC NOCs are increasingly aligned with their ambitions to expand their LNG and trading businesses on a global basis.

“On the other hand, a more cautious approach by NOCs on spending is likely to reduce rig demand, rationalise average day rates and weigh on the overall profitability of the region’s oil drillers. We think that oil drillers’ rating headroom could shrink as a result, but we do not expect any rating pressure in the short term. In addition, industry consolidation could help balance rig supply and demand and subsequently support day rates,” the report remarked.

“In addition, NOCs are aiming to achieve greater integration along the value chain and are leveraging their trading arms to make the supply of feedstock from upstream to downstream operations more reliable. Aramco’s downstream operations (manufacturing, marketing, refining, and processing) utilise more than 50% of the crude oil it produces (53% as of end-2024),” S&P concluded.

The post Capex of GCC national oil companies to hit USD 125 billion by 2027: S&P report appeared first on International Finance.

Starting with early rule-based programmatic trading in the 1970s and 1980s, finance firms have long applied statistics and computing to markets. In the 1990s and 2000s, machine learning and neural networks added sophistication.

For example, hedge funds like Renaissance Technologies hired PhDs to use AI for pattern recognition. Today, we stand at a new inflexion point with generative AI and large language models that can process massive streams of text and data and even suggest novel trading ideas. As one Wharton finance expert notes, AI’s evolution “from algorithmic trading to personalised advice” has made finance “fertile ground for AI innovation.”

Applications of AI in finance

AI is now embedded in many financial processes. Broadly, AI serves in trading, analysis, and operations. In trading, automated systems place orders faster than any human can. High-frequency trading algorithms, often powered by machine learning (ML), make thousands of small trades every second to exploit tiny price discrepancies. Many of the largest trading venues are dominated by such “automated trading” in highly liquid assets. In other domains, AI systems read and summarise information.

For example, NLP tools scan newsfeeds and social media to gauge market sentiment, a process known as sentiment analysis. A sudden burst of negative tweets about a company might trigger selling by algorithms. In risk modelling and compliance, AI churns through vast data to calculate creditworthiness or portfolio risk in real time.

Advisors and insurers use AI to predict defaults or claims, while banks deploy chatbots to handle customer queries. In short, AI touches everything from trade execution to loan approvals and is effectively “democratising” access to analytics that only big institutions once had.

The influence of AI and algorithms is clearest in a few headline-grabbing episodes. In January 2021, the GameStop saga showed the power of social sentiment and automated strategies. A surge of retail traders on Reddit’s WallStreetBets sent the share price of the video-game retailer GME skyrocketing over several days.

Hedge funds that had short positions in the stock rushed to close them. Eventually, trading apps temporarily halted trading, igniting a political firestorm. Researchers note that “retail investors using the Robinhood platform” collectively drove the sharp price swing. Although that episode was driven by human coordination online, it attracted algorithmic responses, with some trading bots detecting the rapid price trend and either piling in or pulling out, amplifying volatility.

AI-driven trading has also featured in the activity of quantitative hedge funds. Firms like Renaissance Technologies, Two Sigma, DE Shaw, and others have long used machine learning to devise strategies. A 2019 survey identified those four as pioneers in AI-driven investing. These firms process vast alternative datasets, from satellite imagery of retail parking lots to aggregated price patterns, looking for subtle predictive signals.

For example, AI can spot that a retail chain’s lawns are greener or read thousands of local news sites to update earnings estimates. In late 2022, Reuters reported Renaissance’s quant funds using models to target returns. Although strategies are secretive, experts agree that AI “provides a competitive advantage” in systematic trading.

AI and social media can also combine in troubling ways. Studies and news accounts warn of sentiment manipulation using bots. In a recent report, experts imagined hundreds of AI-generated social media profiles pushing a narrative about a stock. Real people reacting to the buzz drive the price up or down, while those who detect the narrative profit.

The danger is that neither the promoter nor some of the manipulators even realise they’re part of a larger AI-driven scheme, making enforcement hard. In practice, regulators have seen smaller-scale attempts in crypto and DeFi, where “malicious actors…deploy AI bots” on platforms like Telegram to hype assets.
These examples highlight how automated sentiment analysis and engagement can influence markets, sometimes legitimately, with bots surfacing true trends and at other times through coordinated pumping.

Speed, scale and smarter markets

The attraction of AI in finance is clear, as it does things humans cannot. Speed and automation are paramount. Machines can execute orders in microseconds and monitor markets around the clock, far faster than any trading floor. This rapid processing tightens bid-ask spreads and improves liquidity in normal times.

As the IMF notes, technology has “improved price discovery, deepened markets, and often dampened volatility” in normal periods. AI also excels at scalability and data processing. Financial markets generate enormous volumes of data on prices, news, social posts, filings, and satellite images, and AI can sift through it all.

Advanced neural networks and LLMs (Large Language Models) can turn unstructured text into structured signals. For instance, a generative model can instantly read a regulatory filing or earnings call transcript, flagging risks or opportunities. The IMF notes that generative AI lets investors “process very large amounts of unstructured, often text-based, data,” which can improve forecasts and price accuracy.

Another benefit is pattern recognition and precision. AI algorithms can spot complex statistical patterns that humans cannot see, such as nonlinear relationships or high-dimensional correlations.

In portfolio management, for example, deep-learning models and reinforcement learning (RL) can adapt trading rules over time. Quantitative analysts now use RL to optimise asset allocation dynamically, a method well-suited for constantly shifting markets.

These models “identify complex patterns in large datasets” by using millions of parameterised rules, going far beyond traditional formulae. In effect, AI can tailor strategies to ever-changing conditions, learning minute details of market microstructure.

This leads to efficiency and consistency, and routine tasks like compliance checks or customer service get automated via RegTech tools and chatbots, freeing humans for higher-level thinking. In trading, even a tiny improvement can be valuable. A recent AI pilot by HSBC reportedly found a quantum-enhanced model that improved trade-fill predictions by 34% over classical methods.

Finally, AI can open new markets and lower costs. According to the IMF, AI tools are reducing barriers to entry and making it feasible for smaller firms or even individuals to analyse less-liquid markets like emerging debt or certain commodities. By automating research, coding, and data gathering, generative AI might lower the expertise needed to trade exotic assets.

In retail finance, AI-powered robo-advisors have democratised wealth management. One report notes that about half of retail investors say they would use ChatGPT or similar AI to choose or rebalance investments.

This suggests AI is making advanced analysis available to “anyone,” not just Wall Street. Overall, proponents argue these gains, faster reactions to news, more thorough analysis, and automation, should make markets more efficient and investors more informed.

Herding, black boxes and volatility

AI in finance may sound like an interesting and exciting concept, but it is not risk-free. A key concern is model correlation or “monoculture.” When many firms use similar data and algorithms, their trades tend to move together. Regulators and economists warn that this can amplify swings.

For example, if numerous deep-learning models all see a similar signal, they might simultaneously sell stocks, creating a cascade. The Bank of England and the SEC have warned that advanced AI’s “hyper-dimensionality” and shared data sources could lead to just a few dominant models or data providers. In practical terms, a “monoculture” of strategies can increase market correlations and herding. In stressed markets, this may cause liquidity to evaporate suddenly.

A recent IMF analysis noted that many algorithmic funds include safety mechanisms that can all activate at once, causing feedback loops. The 2010 “Flash Crash” is a cautionary example of an automated sell order in one market leading to a chain reaction, briefly knocking 1,000 points off the Dow within minutes.

Though that crash predated today’s AI, it illustrates the danger of automated systems acting in unison. Experts now worry AI-driven trading could produce even faster and larger moves.

Closely related is model opacity and explainability. Modern AI models are often “black boxes” that even their designers cannot fully explain how a specific trading decision was reached. This poses problems for oversight. If an AI fund suddenly accumulates a large position in an obscure asset, regulators might not understand why.

The IMF notes that market participants insist on human oversight and explainable strategies, avoiding purely “black box” approaches. Likewise, a recent Sidley (law firm) report warns that deep-learning and reinforcement-learning systems can have “emergent behaviour” that current market rules aren’t built to catch.

For example, if an AI learnt to detect fraud or manipulate prices in some non-obvious way, standard surveillance systems might miss it. The opacity also raises ethical concerns. How do we verify that AI decisions are fair and unbiased? Finance is littered with historical biases, so an AI trained on past records might perpetuate discrimination. Wharton researchers point out that “bias in AI models is particularly pertinent” in finance, especially lending and insurance.

There are also privacy and manipulation issues. Bad actors can use AI to tailor scams or spread disinformation. SEC Chair Gary Gensler warns that AI-driven narrowcasting can facilitate fraud by zeroing in on individuals’ vulnerabilities. Indeed, regulators have already flagged concerns about AI-generated “deep fakes” of company announcements or rumours that could jolt markets.

Finally, there is the risk of systemic volatility. Many worry that AI might make crises worse by speeding up decision-making. In turbulence, when computers pile into or out of trades in milliseconds, prices can swing violently.

The Sidley report cites the IMF in noting that many AI strategies include circuit-breaker logic that all trigger together under unprecedented moves, risking a sudden freeze of liquidity. In other words, while AI may “damp down” routine volatility by making markets more efficient, it might also set the stage for faster, sharper shocks. Small errors or adversarial attacks on widely used models could propagate quickly across markets. There’s also a concentration risk, and just a few tech firms provide the most advanced AI services and cloud infrastructure, so outages or cyberattacks could disrupt financial systems more broadly.

Governance meets technology

Awareness of these issues is growing. Governments and regulators worldwide are moving to govern AI in finance. In the EU, for example, the new AI Act will classify many financial AI systems as “high-risk” and impose strict obligations.

Practices like AI-based credit scoring or risk pricing will have to meet transparency, data quality, and audit requirements. The stated goal is “consistency and equal treatment in the financial sector.”

Financial institutions are also starting to set their own AI governance. Many banks now require human sign-off on automated strategies. Investment funds maintain “model risk management” teams to test how strategies behave under stress. After the GameStop episode, social platforms began cracking down on stock-promo groups. And financial regulators update rules in light of faster trading speeds.

Still, experts say more will be needed. For example, regulators worry about a lack of transparency when nonbanks use cutting-edge AI outside full supervision. There are calls for international coordination, like the Financial Stability Board surveying AI preparedness in different countries.

Another trend on the horizon is quantum computing. While today’s AI uses classical computers, quantum machines promise even more power. If scalable quantum computers arrive, they could revolutionise optimisation and simulation problems in finance.

Banks are already experimenting. In 2025, HSBC announced a pilot with IBM showing that a quantum algorithm could predict bond trade outcomes 34% better than classical methods.

UBS, Citigroup, and others are researching quantum for portfolio optimisation and risk analysis, and analysts estimate the “quantum technology” market could reach $100 billion by 2030.

In plain terms, quantum computing could solve certain portfolio or pricing problems much faster than today’s fastest supercomputers. However, practical quantum advantage remains in early stages, and much of that promise is years away. Even so, finance leaders like HSBC’s quantum head call this a “new frontier” in computing for markets.

Tale of two traders

The AI wave affects big institutions and small investors differently. Large financial firms such as banks, hedge funds, and trading firms have the resources to develop sophisticated AI. They run vast data centres, hire machine-learning experts, and deploy cutting-edge models.

These institutional players have led the AI adoption for over a decade as they’ve used automated algorithms in HFT and complex derivatives trading. They also invest in AI for risk management and compliance. Because of their scale, they have an edge in computing speed and data access.

Retail investors have lagged but are catching up. The same chatbots and analysis tools that institutions use are now available to individuals in a lighter form. As one industry report noted, about half of retail investors say they would use AI tools to pick or adjust investments, and around 13% already do. User-friendly platforms now offer AI-driven advice and portfolio screening.

For example, retail-friendly robo-advisors automate investing for individuals with modest accounts. Even individual day traders are experimenting with off-the-shelf AI bots or sentiment-tracker apps. Indeed, the widespread curiosity about ChatGPT and AI has “democratised” access to analysis once reserved for big banks. One former UBS analyst remarked that using ChatGPT for stock research was akin to “replicating many workflows” of an expensive Bloomberg terminal.

Balancing innovation and stability

AI’s role in finance is growing fast. As the IMF puts it, generative AI is the “latest stop on a journey” where technology incrementally improves markets. Its benefits in faster processing, new insights from data, and lower costs have already transformed many aspects of trading and investment.

But the journey is not without bumps. Our analysis shows that there are real risks that correlate with AI models, as they could unintentionally synchronise market behaviour, create opaque algorithms, trigger flash crashes, and mislead investors.

Addressing these issues will require vigilance and innovation on their own part. Regulators are awakening to the challenge, calling for AI governance frameworks and updating rules for our faster, more complex markets.

Financial firms are instituting controls on things like explainability requirements and kill switches for trading bots. Meanwhile, new technologies on the horizon, like quantum computing, promise even more powerful tools.

In the end, the AI transformation in finance mirrors other revolutions by creating opportunities and pitfalls. The central question will be how these systems are deployed. Used wisely, they can make markets more efficient and accessible to more people. Used recklessly, they could amplify our worst crashes or widen inequalities.

For investors and policymakers alike, the task is to harness AI’s ingenuity while keeping our collective financial system resilient. Industry leaders must ensure AI markets remain “transparent, fair, and inclusive,” even as the algorithms get ever smarter.

The post AI drives change in global markets appeared first on International Finance.

As per the noted policy research centre, Yale Budget Lab, “Trump’s moves, aimed broadly at reviving a declining manufacturing base, lifted the average tariff rate to nearly 17% from less than 3% at the end of 2024, and the levies are now generating roughly USD 30 billion a month of revenue for the US Treasury.”

These disruptive moves brought world leaders scrambling to ⁠Washington seeking deals for lower rates, often in return for pledges of billions of dollars in American investments. While framework deals were struck with major trading partners like the European Union (EU), the United Kingdom, Switzerland, Japan, South Korea, ⁠Vietnam ‌and others, things have still remained pending with China and India, despite multiple rounds of talks, both at the leadership and trade mission levels. For India, the tariff amount has been the highest, 50%, including the penalty for buying Russian crude and weaponry, a move which geopolitical analysts dubbed as an arm-twisting one to make New Delhi fall in line with Washington’s line on the topic of Ukraine.

However, after months of decline, India’s exports to the United States rose 22.61% to USD 6.98 billion in November, while the Narendra Modi government has been focussing on aggressive policy reforms on the domestic front, apart from diversifying its export basket by signing trade deals with United Kingdom, Oman and New Zealand, to absorb the blows given by the 50% tariffs from Uncle Sam. All eyes will be on the fourth quarter, as the South Asian country’s bilateral talks with both the EU and the United States progress at a steady pace, with New Delhi anticipating the high-stakes deals to be signed by the end of March.

The EU got criticised by many for its deal for a 15% tariff on its exports and a vague commitment to big American investments. The then French prime minister Francois Bayrou even ⁠called it an act of submission and a “sombre day” for the bloc, while other bloc partners shrugged the arrangement as the “least bad” deal on offer.

“Since then, European exporters and economies have broadly coped with the new tariff rate, thanks to various exemptions and their ability to find markets elsewhere. French bank Societe Generale estimated the total direct impact of the tariffs was equivalent to just 0.37% of the region’s GDP,” noted Reuters, as it added further, “meanwhile, China’s trade surplus defied Trump’s tariffs to surpass USD 1 trillion as it succeeded in diversifying away from the US, moved its manufacturing sector up the value chain, and used the leverage it has gained in rare earth minerals – ⁠crucial inputs into the West’s security scaffolding – to push back against pressure from the US or Europe to curb its surplus.”

The tariff warfare took a limited toll on the American economy, as the latter suffered a modest contraction in the first quarter amid a scramble ‍to import goods before tariffs took effect, but quickly rebounded and continues to grow at an above-trend pace thanks to a massive artificial intelligence (AI) investment boom, along with resilient consumer spending. The International Monetary Fund (IMF), in fact, twice lifted its global growth outlook in the months following Trump’s “Liberation Day” tariffs announcement in April 2025 as uncertainty ebbed and deals were struck to reduce the originally announced rates.

“And while the United States’ inflation remains somewhat elevated in part because of tariffs, economists and policymakers now expect the effects to be milder and more short-lived than feared, with cost sharing of the import taxes occurring across the supply chain among producers, importers, retailers and consumers,” Reuters reported.

A big unknown for 2026 is whether many of Trump’s tariffs will be allowed to stand, as a legal challenge has been registered to the Supreme Court, to counter the novel premise for what the Republican branded as “reciprocal” tariffs on goods from individual countries and for levies imposed on China, Canada and Mexico (tied to the flow of fentanyl into the US). The case was argued before the court in late 2025, and a decision is expected in early 2026.

The Trump administration insists it can shift to other, more-established legal authorities to keep tariffs in place should it lose. But those will likely be limited in scope, and a loss at the Supreme Court level might prompt the administration to renegotiate the deals struck so far, thereby ushering in a new era of uncertainty about where the tariffs will end up.

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All this was possible only due to the stewardship of His Highness Sheikh Maktoum bin Mohammed bin Rashid Al Maktoum, who served as the Minister of Finance during this transformation.

The numbers speak for themselves, as the federal budget swelled to a historic AED 92.4 billion while maintaining a perfect balance. Sovereign bonds traded at just nine basis points above US Treasuries, and credit ratings were at the pinnacle of investment grade.

It is essential to note that when His Highness Sheikh Maktoum assumed the finance portfolio in September 2021, the economy was reeling from post-pandemic volatility, and inflation was skyrocketing. To top it all off, there was geopolitical fragmentation in the Middle East.

But he didn’t try to defend the old world. He bet on transformation. His Highness Sheikh Maktoum aggressively reconstructed the UAE with a new financial architecture that positioned it as a mature global hub, rivalling Singapore, London, and New York on fronts like institutional depth and tax arbitrage.
A technocrat’s formation

Apart from holding a bachelor’s degree in business administration from the American University in Dubai, His Highness Sheikh Maktoum also attended prestigious institutions such as Harvard and the Dubai School of Government.

The influence of Harvard on this Gulf leader is unmistakable. His ministry employed several sophisticated financial strategies, including zero-based budgeting, counter-cyclical fiscal buffers, and data-driven, integrated policy frameworks. It’s an approach that demonstrates his preference for empirical concepts of data analysis over basic intuition.

His Highness Sheikh Maktoum wears many hats. He is the Chairman of the Dubai International Financial Centre (DIFC), which oversees over 1,000 regulated firms and 500 wealth managers. The role gives him intimate knowledge of global capital demands and an understanding of regulatory certainty, common law frameworks, and frictionless repatriation.

He has also served as the Chairman of the Dubai Financial Audit Authority since 2018. In this position, he developed an obsession with compliance and waste prevention that has become an integral part of federal procurement in the UAE.

As the Chairman of the Dubai Market Supervisory Committee, His Highness Sheikh Maktoum privatised and revitalised local exchanges. It is perhaps this intersection of federal authority and Emirati-level operational experience that allows him to create policy so lucrative and alluring to the global elite.

The ministry runs with corporate efficiency. There are key lieutenants, such as the Minister of State, Mohammed bin Hadi Al Hussaini, and Under Secretary Yunus Haji Al Khouri, who translate Maktoum’s vision into bureaucratic execution.

Their high precision and capacity allow decisions on bond issuances, tax clarifications, and budget reallocations to move lightning-fast. If it were not for them, the UAE would lag, just like any other traditional sovereign bureaucracy.

The fiscal pivot

The Maktoum era is very different from all that preceded it in terms of federal budgeting. For example, he adopted zero-based budgeting from 2022 to 2026, which represents a methodological revolution.

Most federal budgets are incremental, meaning they adjust the prior year’s allocation for inflation. Zero-based budgeting, on the other hand, forces the ministry to justify every item from scratch each cycle. It’s a move that results in brutal efficiency, eliminating legacy programmes that no longer serve their purpose and reallocating that capital to more immediate priorities, like digital infrastructure and human capital development.

And fiscal discipline might seem like austerity masquerading as prudence, but that’s not the case. Let’s examine the 2026 federal budget, which was approved in October 2025. There was a staggering 29% increase over the 2025 budget of AED 71.5 billion.

In just a couple of years, the budget expanded from AED 64.1 billion to AED 92.4 billion. Although there was a massive expansion, the budget, to everyone’s surprise, remained perfectly balanced. Projected revenues are matching expenditures to the dirham.

The Federal Government is slowly becoming an active investor, and not just a service provider. The expenditure is based on investment logic rather than consumption. As usual, social development consistently absorbs almost 40% of the budget. The state is very focused on boosting workforce productivity and human capital expenditure.

The budget saw the sharpest increase in the financial investment category, with an allocation surge for outward foreign direct investment and the capitalisation of federal entities. What’s impressive is the revenue diversification that supports this expansion. While global oil prices were very supportive, the ministry actively constructed a budget that avoided excessive dependence on oil revenues.

In 2026, revenue will come from value-added tax (VAT), the new corporate tax regime, and the domestic minimum top-up tax introduced in 2025. These measures have already proven effective in protecting the Emirati economy from significant fluctuations in oil prices.

The taxation revolution

His Highness Sheikh Maktoum oversaw the delicate transition from a zero-tax jurisdiction to a competitive tax jurisdiction, threading the needle between global compliance and commercial attractiveness. Effective for financial years starting on or after June 1, 2023, the regime is looking to reach full maturity and stabilised compliance by 2026.

The architecture reflects sophisticated policy design. A standard statutory rate of 9% applies to taxable income exceeding AED 375,000, making it among the lowest corporate rates globally compared to the roughly 23% global average. A 0% rate shields taxable income up to AED 375,000, protecting SMEs (small and medium enterprises) and startups with tight cash flows from the deadweight loss of taxation on marginal businesses.

The challenge of taxing the mainland without compromising Free Zone competitiveness was addressed through the concept of the Qualifying Free Zone Person, which allows for 0% tax on Qualifying Income. The dual-track system preserved the UAE’s status as a re-export and financial hub while bringing the domestic economy into the tax net.

The implementation of OECD Pillar Two rules via the Domestic Minimum Top-Up Tax showcased sophisticated financial diplomacy. Pillar Two mandates a 15% minimum global tax rate for multinational enterprises with consolidated revenues exceeding 750 million euros. If the UAE had kept its tax rate at 9% for multinational enterprises (MNEs), the additional 6% would have been collected by the home countries of those MNEs as a top-up tax. However, by implementing the Domestic Minimum Tax (DMTT), the ministry successfully secured this 15% revenue domestically.

The approach transformed a global regulatory challenge into a national revenue opportunity, allowing the UAE to retain tax proceeds that would have otherwise benefited foreign governments.

What makes this achievement remarkable is the absence of capital flight that typically accompanies tax regime changes. The ministry conducted extensive consultation with the business community, providing clear guidance and generous transition periods.

Under His Highness Sheikh Maktoum’s chairmanship, the Federal Tax Authority evolved into a robust enforcement agency. Apart from the grace period mentality meeting its end, corporate tax was described as a permanent fixture of business operations.

Rigorous audit protocols focused on transfer pricing to prevent profit shifting. New penalties for non-compliance were introduced, and the rollout of a decentralised e-invoicing model aimed to digitise the VAT trail and increase real-time revenue visibility for the Treasury.

Building the yield curve

Before 2022, the UAE Federal Government didn’t have a local currency debt market and mostly relied on reserves and individual Emirati issuances. His Highness Sheikh Maktoum had some visionary plans. He established the Debt Management Office and launched a dirham-denominated bond programme.

It wasn’t a move done to fund deficits, as he had none. Instead, it helped to construct a sovereign yield curve that is becoming the backbone for corporate debt pricing and provides banks with high-quality liquid assets. The Treasury Bond Programme (launched in 2022) and the Treasury Sukuk Programme (launched in 2023) provided sophisticated auction mechanics, helping primary dealers discover price.

The real test was the January 26 auction, when the ministry issued AED 1.1 billion in instruments. Demand reached AED 5.15 billion, indicating a 4.7-times oversubscription, reflecting deep liquidity and high investor confidence. The yield to maturity achieved was 3.6% for Treasury Sukuk and 3.9% for Treasury Bonds, representing a spread of just nine basis points above comparable US Treasuries.

For those who do not understand, in sovereign finance, a single-digit spread over the global risk-free rate is the ultimate seal of approval. What it implies is that there is little to no credit risk, and faith in the currency peg is extremely robust.

The total outstanding volume has reached AED 28 billion, and the instruments are expected to be listed on NASDAQ Dubai for secondary market liquidity by early 2026. The new curve helps UAE corporates price their own debt issuances off the sovereign benchmark, removing the need to rely on US dollar benchmarks or opaque bank lending rates.

The text highlights the significant development of the nation’s financial architecture. Throughout 2025, the UAE maintained top-tier sovereign credit ratings, with Moody’s rating it at Aa2, S&P at AA, and Fitch at AA-.

The rating agencies praised the UAE’s fiscal discipline, substantial sovereign wealth, and effective policy framework as the primary reasons for this impressive performance and credibility.

The capital markets renaissance

Under His Highness Sheikh Maktoum, the Dubai Financial Market thrived along with the Abu Dhabi Securities Exchange. A key move came when parts of the state were opened to private investors. State-owned firms were brought onto the markets as key players.

The shift drew outside money from global investors. By 2025, ADX had not only grown to AED 3.13 trillion in value, but trading volume also climbed sharply to AED 385 billion. Up 27.1% in 2024, the DFM General Index led regional markets. Market capitalisation hit AED 907 billion during that period. Foreign investors made up half of all trading activity at DFM by year’s end. That shift marked a turn away from small local participants toward professional participation on the world stage.

The Public Sector IPO Programme successfully facilitated each filing from start to finish. A notable example is Talabat’s debut in 2024, which raised AED 7.5 billion, making it the largest tech offering globally that year. A fine demonstration of the fact that local markets can support significant tech valuations similar to those in global financial hubs.

What set Talabat apart was not just its size; it highlighted that Dubai is competitive in attracting tech companies, drawing them away from London and Nasdaq, where over 60% of shares were acquired by international funds.

Other landmark deals included ADNOC Gas and ADNOC Logistics & Services trading on the Abu Dhabi Exchange (ADX), both valued in the billions. These listings provided investors with direct access to energy logistics. Capital flowed in both directions, with state holdings transforming into capital that was reinvested in new national projects, simultaneously creating substantial pools of available funds. These listings enhanced the UAE’s representation in major indexes, such as the MSCI Emerging Markets.

Changes also took hold in how markets operate, including the launch of entities like xCube that actively trade shares. Doors have opened for international setups like dual trading platforms and special purpose acquisition companies. Methods around setting share prices also became more adaptable, brought into line with practices already established across London and New York.

Banking sector resilience

By mid-2025, banking assets had reached AED 4.973 trillion, reflecting a 15.4% increase compared to the previous year. Despite the introduction of a corporate tax, lending continued to rise by 11.1%, indicating that the financial markets adapted smoothly without hindering project development.

A significant improvement was observed in asset quality, with the net non-performing loan ratio falling sharply to 1.7%. Meanwhile, the capital strength stood at 17.3%, well above the requirements set by Basel III.

From day one, the ministry helped shape how digital finance works across UAE banking. With the Jisr system live for Central Bank Digital Currency, connected to the Instant Payment Interface, the country now leads in fast-settlement technology. Instead of relying on overseas systems, local businesses now use Jaywan (a homegrown card option) to cut out middlemen and save on transaction fees.

The fintech ecosystem has exploded under this supportive regulatory environment. Digital lending partnerships like du Pay and Deem Finance are providing instant credit decisions to consumers, while the entry of specialised institutions like crypto-focused Maerki Baumann demonstrated regulatory sophistication in balancing innovation with risk management.

Perhaps the most critical defensive victory was navigating the FATF evaluation process. After the UAE was added to the Grey List in early 2022, the country faced rising compliance costs and reputational risks. In response, the ministry established a high-level committee to tackle strategic deficiencies.

In February 2024, the FATF removed the UAE from the Grey List, acknowledging the significant progress made. The decision led to a reduction in correspondent banking costs and the reinstatement of full investor confidence.

The removal reduced the cost of international transactions for UAE banks by eliminating the enhanced due diligence requirements that foreign correspondents had imposed, effectively lowering the friction cost of cross-border finance by 20 to 30 basis points on average.

The ministry intensified reforms ahead of 2026’s mutual evaluation, issuing Federal Decree Law No. 10 of 2025 to reinforce the AML/CFT framework with criminal penalties of up to AED 50 million for unlicensed financial activities and rigorous campaigns to update Ultimate Beneficial Owner registries. The campaign to clean up the UBO registry was particularly aggressive, with over 200,000 corporate entities required to update their records under threat of administrative penalties.

In May 2025, Abu Dhabi’s hosting of the first global roundtable of FATF-Style Regional Bodies symbolised the UAE’s transformation from a jurisdiction under scrutiny to a convener and thought leader on financial integrity.

The legacy of financial maturity

During His Highness Sheikh Maktoum’s tenure as the UAE Minister of Finance, the Emirates definitively moved beyond being labelled an emerging market. Progress came through balancing bold spending (up 29%) with careful management, boosting the budget to AED 92.4 billion.

Growth received a push without relying solely on oil revenues; new sources of income helped stabilise public finances. Local bond segments emerged, providing residents and businesses with market tools they previously lacked. Stock trading areas experienced a resurgence, creating opportunities for long-term investment.

While nearby Gulf countries are taking their time to complete their economic reforms, the UAE has excelled in its efforts due to its sheer speed. Deep reforms took place here in just half a generation’s lifetime. The Gulf nation, at short notice, has successfully navigated the most difficult transition any petro-state can attempt, whether from rentier to value creator or from resource extractor to financial powerhouse.

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These include the total cryptocurrency market capitalisation surpassing the $4 trillion threshold, the enactment of the GENIUS Act, which established the first comprehensive federal regulatory framework for stablecoins in the United States, and a parabolic price trajectory for Bitcoin that saw it breach new all-time highs before succumbing to a macro-induced correction in November.

While the breach of the $4 trillion mark signalled a structural re-rating of the asset class and placed it on par with major global equity exchanges, market dynamics revealed a bifurcation between asset performance and infrastructure growth.

Bitcoin’s ascent to a peak of approximately $126,000 was fuelled by the “Trump trade” and massive ETF inflows, yet its subsequent 30% correction underscored the market’s continued sensitivity to macroeconomic shocks, specifically stagflationary signals from the US labour market. Conversely, the stablecoin sector, now buttressed by federal law, decoupled from speculative volatility to process transaction volumes rivalling global payment networks like Visa, which confirms its utility as a settlement layer for the digital economy.

We dissect these trends through six core sections, including a detailed analysis of legislative reform. By synthesising data on regulatory shifts and on-chain metrics, we offer a nuanced perspective on how the industry has transitioned from a speculative fringe to a regulated, albeit volatile component of the global financial architecture.

Welcome to the big leagues

In July 2025, the digital asset sector achieved a historic valuation milestone as the total market capitalisation surpassed $4 trillion for the first time. The event was not merely a psychological victory for early adopters but a quantitative signal of the asset class’s integration into the broader financial system. To contextualise this growth, the market cap effectively doubled from its previous cycle highs, driven by a confluence of retail resurgence and institutional capital deployment.

The ascent to $4 trillion was underpinned by distinct structural factors that differentiate this cycle from the speculative manias of 2017 and 2021. Foremost among these was the deepening of liquidity pools facilitated by the approval of spot ETFs across multiple jurisdictions.

The “ETF wrapper” served as a critical conduit for wealth management platforms and pension funds to allocate capital without the operational burden of custody, effectively unlocking trillions in previously sidelined capital.

Data from the third quarter of 2025 indicates that the rally was supported by extensive institutional demand, which was further catalysed by legislative advancements in the United States. The market did not rise in a vacuum; rather, it was buoyed by a “pro-crypto” administration and a tangible shift in regulatory posture. The correlation between legislative clarity and capital inflows became undeniable, as evidenced by the sharp uptick in valuations following the passage of the GENIUS Act.

However, the composition of this market capitalisation reveals a significant evolution in capital allocation. While Bitcoin retained its dominance as the primary store of value and accounted for over $2.4 trillion of the total market cap at its peak, the 2025 cycle witnessed a broadening of the value spectrum. Capital rotated aggressively into programmable blockchains and stablecoins, reflecting a market that increasingly values utility and yield over pure speculation.

The psychological impact of crossing the $4 trillion mark forced a reassessment of risk models among global macro strategists. At this scale, the asset class becomes too large to ignore for sovereign wealth funds and endowment managers who must now consider digital assets as a necessary component of a diversified portfolio to hedge against debasement and capture technological alpha. Industry analysts noted that crossing this mark signals a “structural re-rating” of crypto, moving it from an asymmetric bet to a staple allocation.

The market demonstrated resilience by holding above the $3.88 trillion level during periods of consolidation, dipping only approximately 2% from peak levels during initial profit-taking phases. Such consolidations are characteristic of maturing markets where rapid appreciation is digested through time rather than deep price corrections. The ability of the market to sustain valuations above the $4 trillion line for extended periods in mid-2025 suggested that the capital base had shifted from highly leveraged retail traders to “sticky” institutional holders with longer time horizons.

As liquidity deepened, it also fragmented across a growing number of venues and chains. Layer 1 has seen good growth, but introducing Layer 2 solutions on top of it means that execution and infrastructure have become as critical as asset selection. And experts reiterate that sustaining this growth would require resilient systems that are adept at handling high-frequency institutional flows and smart risk frameworks to manage the disparate liquidity pockets.
Uncle Sam legalises digital dollar

If the $4 trillion market cap was the quantitative highlight of 2025, the Guiding and Establishing National Innovation for US Stablecoins Act of 2025 (GENIUS Act) was its qualitative cornerstone. Signed into law by President Donald Trump on July 18, 2025, this bipartisan legislation ended years of regulatory purgatory for the digital asset industry. It established a comprehensive federal framework for payment stablecoins, effectively legitimising the sector’s most practical application, which is dollar-denominated digital settlement.

The GENIUS Act is transformative primarily because of its definitional clarity and establishment of a dual-track regulatory system. It amends US federal securities laws and the Commodity Exchange Act (CEA) to explicitly state that a payment stablecoin is not a “security” or a “commodity”. This jurisdictional carve-out is the “holy grail” for issuers who have spent years navigating the aggressive enforcement actions of the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC).

Instead of shoehorning stablecoins into 1930s securities laws, the Act places them under the supervision of banking regulators through two distinct pathways. One through the Federal Track for Non-Banks. Federally licensed non-bank stablecoin issuers are now subject to oversight by the Office of the Comptroller of the Currency (OCC). This allows fintech companies to operate with a national charter without becoming full-fledged banks. Secondly, there are subsidiaries of insured depository institutions that fall under the supervision of their primary federal regulator, such as the Federal Reserve or the FDIC.

Crucially, the Act also preserves the state regulatory system. Issuers with less than $10 billion in outstanding stablecoins can opt for regulation under a state-level regime provided that the state’s standards are deemed “substantially similar” to the federal framework. That provision was a major victory for state regulators like the NYDFS, ensuring that local innovation hubs are not crushed by federal preemption while still maintaining a high national standard.

A central pillar of the GENIUS Act is the imposition of strict prudential standards designed to prevent the “bank runs” that plagued the sector in previous cycles. As per the legislation, all stablecoin issuers must maintain 1:1 reserves backed by high-quality liquid assets (HQLA).

The prohibition on rehypothecation is particularly significant as it prevents the specific type of leverage-driven contagion that caused the collapse of algorithmic stablecoins and unregulated lending desks in 2022. By mandating that reserves be held in bankruptcy-remote accounts with priority claims for holders, the Act effectively creates a digital equivalent of cash that is safer than uninsured bank deposits.

One of the most debated aspects of the GENIUS Act was the prohibition on interest payments. Issuers are explicitly forbidden from passing the yield generated by their reserve assets (such as Treasury bills) on to the holders of the stablecoins. That provision was the subject of intense advocacy from the traditional banking lobby, including the American Bankers Association.

They argued that if stablecoins offered a risk-free yield comparable to Treasuries, they would suck liquidity out of the traditional banking system and destabilise community banks that rely on low-cost deposits.

For the crypto industry, this creates a clear business model trade-off. While issuers cannot compete on yield, they are forced to compete on utility, speed, and integration. This has pushed issuers to focus on building payment rails and merchant networks rather than simply marketing their tokens as savings vehicles.

The GENIUS Act also integrates stablecoins into the national security apparatus. Issuers are explicitly subject to the Bank Secrecy Act (BSA), obligating them to implement rigorous Anti-Money Laundering (AML) and Know Your Customer (KYC) programmes.

The Act grants the Treasury Department enhanced powers to combat illicit finance, including requirements for issuers to possess the technical capability to “seize, freeze, or burn” tokens when legally ordered. That provision addresses the “sanctions evasion” narrative often used by critics, ensuring that compliant stablecoins cannot be used as a tool for rogue states or criminal enterprises.

Issuers are also forbidden from using “deceptive names” or marketing materials that imply their product is backed by the “full faith and credit of the United States” or covered by federal deposit insurance. Such rules prevent the dangerous misconception that a private stablecoin is a government-guaranteed instrument.

Wall Street’s effect on Bitcoin

The year 2025 reinforced a fundamental truth about Bitcoin. It remains a highly sensitive liquidity gauge capable of delivering parabolic returns and devastating corrections in equal measure.

The narrative of “institutional maturation” did not dampen volatility; rather, it introduced new transmission mechanisms for macro shocks to cascade through the market.

Bitcoin’s performance in the first three quarters of 2025 was nothing short of spectacular. Fuelled by the “Trump trade” following the election, favourable regulatory signals and the relentless bid from spot ETFs, Bitcoin embarked on a parabolic run. By October, the asset had breached the six-figure mark, setting a new all-time high of approximately $126,270. The rally was characterised by a palpable sense of euphoria dubbed “Uptober” as market participants anticipated a “super-cycle” driven by the convergence of sovereign adoption and corporate treasury accumulation.

The role of ETFs in this rally cannot be overstated. BlackRock’s iShares Bitcoin Trust (IBIT) alone amassed massive assets under management by 2025, with the fund becoming the most successful ETF launch in history. The “passive bid” from these products created a constant demand shock that stripped supply from exchanges, forcing prices upward in a classic liquidity squeeze.

The euphoria came to an abrupt halt in November. Bitcoin crashed approximately 30% from its peak, sliding to trade near $82,605 on November 21. The correction wiped out over $1.2 trillion in total digital asset value in just six weeks, a destruction of wealth equivalent to the GDP of a mid-sized G7 nation.

The catalyst for the crash was a “stagflationary” shock delivered by the US labour market. A long-delayed US jobs report released confusing data that showed job creation rebounding while the unemployment rate simultaneously climbed to 4.4%. The mixed signal clouded expectations for Federal Reserve rate cuts, triggering a “risk-off” event across all global markets.

The crash revealed the double-edged sword of institutionalisation. While ETFs provided inflows during the rally, they also provided a frictionless exit door during the panic. United States-listed Bitcoin ETFs recorded $903 million in outflows on a single Thursday as the “paper hands” of the new cohort folded at the first sign of trouble.

When code became cash

Bitcoin dominated the macro narrative of 2025 and has matured as an asset class with store-of-value propositions. But the focus is slowly shifting to high-throughput utility, and all eyes are on alt-coins. The “State of Crypto” report highlighted that Hyperliquid and Solana combined to account for 53% of revenue-generating economic activity, signalling a changing of the guard in where value is actually accrued.

Solana emerged as the undisputed leader of the high-performance blockchain sector. In stark contrast to the broader market, Solana’s ecosystem metrics exploded to the upside. Builder interest increased by 78% over the prior two years, making it the fastest-growing ecosystem for developers. That surge in developer activity translated directly into user adoption, with the network processing a significant plurality of the industry’s transaction volume.

The market acknowledged this differentiation. Even during the November crash, Solana-based investment products showed remarkable resilience. While Bitcoin ETFs bled assets, Solana and XRP ETFs recorded consistent inflows, suggesting that investors were actively decoupling their views on “utility” tokens from the macro-driven Bitcoin trade.

If there was one undeniable success story in 2025, it was stablecoins. The total stablecoin supply reached a record high of over $300 billion. More impressively, stablecoins settled $46 trillion in total transaction volume over the year. Even after adjusting for artificial trading volume, the figure stood at $9 trillion, more than five times PayPal’s annual throughput and more than half of Visa’s.

The data proves that stablecoins have found product-market fit beyond crypto trading. They are being used for cross-border B2B payments and remittances in inflation-stricken nations, and as a dollarised savings instrument globally. The GENIUS Act further catalysed this usage by providing the legal certainty needed for banks and multinational corporations to integrate stablecoins into their treasury operations, effectively turning them into a new rail for global commerce.

Patchwork of progress and pain

While the GENIUS Act provided a unified path for the United States, the rest of the world navigated a fragmented and often contradictory regulatory landscape in 2025. The divergence created significant friction for cross-border projects and forced issuers to adopt regional containment strategies rather than global expansion plans.

The European Union (EU) fully implemented its Markets in Crypto-Assets (MiCA) regulation in late 2024 and throughout 2025. While initially hailed as a pioneering framework, MiCA has revealed the steep cost of compliance. Startups faced immense operational burdens to meet prudential and conduct standards, which diverted resources away from innovation. The stablecoin market in Europe faced a specific crisis of relevance. US dollar-denominated tokens continued to hold a 99% market share globally, leaving Euro-denominated stablecoins on the fringes with a market capitalisation of less than EUR 350 million.

In response to this dominance, a consortium of nine major European banks, including ING and Deutsche Bank, formed a new venture in September 2025. Their goal is to launch a fully MiCA-compliant Euro stablecoin to compete with American giants. However, analysts warn that Europe may be “too late” as the network effects of USD stablecoins are already deeply entrenched in global DeFi and payment rails.

In Asia, the regulatory narrative is split between two primary hubs. Hong Kong moved aggressively to capture the digital asset market by enacting the Stablecoin Ordinance, which became effective on August 1 2025. The law introduced a dedicated licensing regime for fiat-referenced stablecoins and required issuers to maintain full reserve backing with high-quality liquid assets. In parallel, regulators proposed new licensing regimes for OTC dealers and custodians to close remaining oversight gaps.

Singapore took a more restrictive approach to offshore risks. The Monetary Authority of Singapore (MAS) enforced a strict deadline of June 30 2025, for Digital Token Service Providers (DTSPs). Any entity providing services from Singapore to customers outside the country was required to obtain a license or cease operations. The move was designed to prevent regulatory arbitrage where firms would set up in Singapore solely to project an image of legitimacy while serving high-risk jurisdictions without local oversight.

Emerging markets continued to drive grassroots adoption, often outpacing regulatory frameworks. Brazil emerged as a leader by establishing a Central Authority for Digital Assets (CADA) in January 2025 and implementing a comprehensive licensing framework that will be fully enforceable by February 2026. The clarity helped boost daily trading volumes in Brazil to USD 1.8 billion.

Nigeria also witnessed a surge in activity after lifting its banking ban on crypto firms. Monthly trading volumes on licensed exchanges rose by 47% in the first quarter of 2025 alone. India similarly saw a recovery in volumes after the initial shock of its tax regime wore off, with the government launching a “Regulatory Sandbox 2.0” to explore tokenised real estate and carbon credits. Together, these developments signal a decisive shift from the “ban and ignore” policies of the past to a “regulate and tax” approach.

The starkest challenge of 2025 remains the lack of global harmonisation. The GENIUS Act in the US and MiCA in the EU operate on fundamentally different principles regarding foreign issuers. The GENIUS Act encourages the US Treasury to pursue mutual recognition, but currently requires foreign issuers to meet US standards to access the American market.

Conversely, MiCA’s strict localisation requirements have forced some global exchanges to delist non-compliant stablecoins for European users. Such a regulatory “spaghetti bowl” threatens to balkanise liquidity and complicate the dream of a seamless global value-transfer layer.

As we look toward 2026, the trajectory is clear. The infrastructure is ready for prime time, and the regulatory wars are largely over, yet the challenge now shifts from survival to scale in a high-stakes macroeconomic environment.

The post The great crypto reckoning appeared first on International Finance.

What’s driving this surge? For one, gaming has penetrated every corner of the globe and every demographic. From consoles like Xbox and PlayStation to mobile games on billions of smartphones, gaming is now a mainstream pastime for more than three billion people, by some counts.

It’s not just about kids in arcades anymore. It has evolved into a massive audience spanning all ages, eagerly spending time and money on interactive entertainment. Major tech and media companies have taken note, with Netflix now offering games alongside films, and Meta (Facebook’s parent) heavily investing in virtual reality gaming experiences. Gaming isn’t merely entertainment anymore; it represents a data-driven, innovation-hungry industry that closely resembles the tech sector.

Leading game publishers operate like Silicon Valley firms, leveraging user data, analytics, and agile development to keep players hooked and revenues rising. In short, video games have become a global economic powerhouse, reshaping how we think about media, culture, and money.

Innovative monetisation models

In the past, selling a video game was a simple transaction, where a customer bought a game once, and that was it. Today, that one-time purchase model is almost quaint. Modern games are designed to generate continuous revenue streams long after the initial download. How does this happen?

It’s achieved through innovative monetisation models that keep players coming back, and keep the cash flowing. Free-to-play games have led the charge, with titles like Fortnite, League of Legends, and Candy Crush allowing anyone to start playing for free, then earn money by selling enticing extras. These “extras” can be purely cosmetic items like character skins and outfits or functional enhancements like new levels, characters, or power-ups. In 2018 and 2019 alone, Fortnite, free to download, generated over $9 billion in revenue from such in-game purchases.

Players willingly pay for digital goods that personalise their experience or give them bragging rights, and those small purchases by millions of people add up fast. Namely, China’s blockbuster mobile game Honor of Kings grossed an estimated $2.6 billion in 2024, largely from in-app microtransactions.

Another lucrative model is the “games as a service” approach, which often uses subscriptions or season passes. Console and PC games increasingly offer monthly memberships or “battle passes” that unlock exclusive content over time. This provides a steady, recurring income.

Even platforms themselves have subscription services. Big tech companies like Microsoft’s Game Pass and Sony’s PlayStation Plus give players access to a library of games for a monthly fee, blending the Netflix model with gaming. Advertising is yet another revenue stream, as many free mobile games show video ads or banner ads, earning pennies per view that translate into substantial revenue at scale. In 2024, brands spent over $32 billion on in-game advertising, a figure that is projected to rise to nearly 38% of all game industry revenue by 2029 as marketers chase the massive, engaged gaming audience.

Crucially, these monetisation methods are designed to enhance or at least not disrupt the player’s enjoyment. Game companies tread carefully because they want to boost revenue without alienating players. The most successful games strike a balance, offering optional purchases or ads that feel like part of the fun. When executed well, players actually appreciate new content and features, and they reward studios with loyalty (and dollars).

By continually updating games with fresh content such as new levels, events, items, and rewards, publishers keep players engaged for years, not just the week after launch. Consequently, this leads to recurrent income that can far exceed the old single-sale model.

A hit game today can essentially become a platform for ongoing monetisation. Little wonder that investors and financial strategists are now deeply involved in game development decisions, ensuring monetisation is baked into game design from the start.

Where play meets profit

Video games have given rise to vibrant virtual economies that increasingly mirror real-world markets. Players buy, sell, and trade digital assets in many popular games, which can often be referred to as the “goods” of a game’s economy. These might include cosmetic items for avatars, special weapons or gear, collectable cards, virtual real estate, or even entire characters.

What’s remarkable is that players often spend real money to obtain these virtual goods, even though the items have no tangible existence outside the game. The appeal lies in what they do for players. For instance, a rare skin might confer status, a powerful item might improve gameplay, or a custom decoration might allow someone to express their identity. In effect, games have created closed-loop economies where virtual currencies and items hold significant perceived value.

For game companies, this represents a financial goldmine. Virtual item sales have become a major revenue source, often eclipsing the upfront price of the game itself. A player might spend $0 to download a mobile game, then willingly spend $10, $100, or more over time on bonus packs or premium currency to enhance their experience.

This model has blurred the line between gaming and traditional commerce. Players are now both consumers and participants in these digital marketplaces. In titles such as Roblox or EVE Online, entire virtual economies flourish. Players can create goods or content and sell them to others for in-game currency, which in some cases can be exchanged back into real money. Some enterprising gamers treat these ventures like small businesses, earning real income by trading in-game commodities.

Occasionally, the virtual economy intersects with reality in jaw-dropping ways. For example, in early 2023, a single digital weapon skin known as a decorative AK-47 rifle skin in Counter-Strike: Global Offensive was sold to a collector for $400,000 in real money. And that wasn’t even the highest. There have been unconfirmed trades of rare game items valued at over $500,000.

In another example, the esports scene for Dota 2 saw its championship prize pool reach $40 million in 2021, funded entirely by players purchasing in-game content. These cases highlight how much value people now place on digital assets. What was once just pixels on a screen can now carry a price tag rivalling a luxury car or a house.

Game developers have nurtured these economies by introducing virtual currencies that players use as intermediate money. For instance, buy 1,000 gems for $10, then spend those gems on items. This indirection helps soften the sense of spending real cash and keeps money circulating within the game ecosystem.

The strategy has paid off handsomely. By 2022, 95% of all game sales revenue was digital rather than physical, reflecting the dominance of in-app purchases and downloads over boxed games. Economists and financial researchers are paying close attention to these virtual markets. Some view them as prototypes for future digital economies, where virtual goods, community-driven value, and creative monetisation could influence real-world business.

NFTs and the metaverse

Beyond the contained economies of individual games, new technologies are pushing the concept of virtual assets even further. Non-fungible tokens (NFTs) and the vision of a broader metaverse have become buzzwords in gaming and finance. In games, NFTs offer a way to give players true ownership of a unique digital item that isn’t confined to a single game’s servers.

An NFT might be a one-of-a-kind sword, a rare character skin, or a plot of virtual land, secured on a blockchain so that players can buy, sell, or trade it outside the game environment. The promise is that a rare digital item could hold value similarly to a physical collectable, with provable scarcity and ownership.

Some early games built around NFTs, like Axie Infinity and Gods Unchained, showed that players would invest significant money for the chance to earn or own valuable in-game NFTs. At one point, Axie Infinity players in developing countries were making a living income through play-to-earn mechanics, though that boom has since tempered.

The metaverse takes the idea of game economies and stretches it to a sprawling virtual universe that blends gaming, social media, and commerce. It’s an immersive online space where people might work, play, socialise, and shop, all using digital avatars. Although the full metaverse concept is still emerging, gaming platforms are already establishing the foundation.

Roblox, Fortnite, and Decentraland host virtual events and marketplaces where brands sell digital merchandise and artists perform concerts for millions of virtual attendees. Tech giants are investing heavily. For example, Facebook rebranded as Meta and has poured billions into VR and AR (augmented reality) technology to stake its claim in the metaverse.

The economic potential is immense. According to Statista, the metaverse market, which includes VR/AR hardware, software, digital goods, and more, could reach $490 billion by 2030. This conservative estimate identifies e-commerce and gaming as the primary revenue drivers, with gaming-related metaverse revenue expected to rise from approximately $10 billion today to $163 billion in 2030.

Projected metaverse revenues by 2030 highlight the dominant roles of gaming and e-commerce in a $490-plus billion virtual economy. Already, dozens of companies are racing to build these new virtual worlds or provide the tools for them.

Aside from Meta and major game studios like Epic Games (creator of Fortnite), there are crypto-native platforms such as The Sandbox and Decentraland that sell virtual land as NFTs. Luxury fashion brands have designed virtual clothing for avatars, and real estate in prime virtual locations has sold for millions of dollars.

Sceptics note that the metaverse hype may be ahead of reality, since user numbers in some blockchain-based worlds are still very modest. However, the convergence of gaming, virtual economies, and blockchain is undeniably shifting paradigms. This points to a future in which digital assets and experiences hold economic significance comparable to physical ones. Regulators and economists are paying close attention to how these trends develop, especially as questions surrounding asset ownership, intellectual property, and taxation of virtual earnings become increasingly important.

Wall Street meets gaming

As gaming has become an economic juggernaut, traditional finance is inventing ways to ride the wave. One response has been the creation of gaming-focused financial products like specialised exchange-traded funds (ETFs). These are investment funds that bundle together dozens of gaming-related stocks, such as game publishers, console manufacturers, esports companies, and others, into one tradable package. The VanEck Video Gaming and eSports ETF (ticker: ESPO) offers investors a wide range of exposure to the gaming industry.

Rather than betting on a single gaming company, one can invest in the sector’s overall growth through such ETFs. This reflects the recognition that gaming is now a serious investment theme. Other funds like Global X’s Video Games & Esports ETF, known as HERO, have also launched, and major investment firms track gaming indices.

The appeal to investors is clear. Gaming has a youthful, global customer base and multiple avenues of revenue—software, hardware, mobile, VR, and more—making it an attractive long-term growth story. Even casual investors are hopping on, since, unlike picking individual stocks, ETFs are accessible and relatively easy to understand, so they have lowered the barrier for putting money into the gaming boom.

Perhaps even more interesting is how gaming has infiltrated the world of fintech and personal finance. Banks, trading apps, and fintech startups have discovered that applying game-like elements can make finance more engaging for a new generation of users.

This trend is broadly called gamification, which involves adding rewards, competition, and playful design to non-game activities. Stock-trading apps like Robinhood famously used animations like confetti and achievement badges to celebrate users making trades, mimicking the positive feedback loops of video games. Robinhood eventually toned this down after criticism, but the influence was unmistakable.

Many investing platforms now have quizzes, progress bars, or even paper-trading games that let users practice trading without real money. The idea is to reduce intimidation and educate new investors by tapping into the motivational tricks of games. Even serious banks have added features like point systems or challenges such as “save $100 this month to earn a badge!” to their mobile apps.

This gamification of finance appears to work. Tasks that might seem tedious, such as budgeting, investing, and learning financial concepts, become more fun and interactive when framed as a game. One finance executive noted that adding game mechanics boosted customer engagement dramatically on their app; users would log in more frequently and invest more regularly when they had streaks to maintain or levels to rise.

Beyond stock trading, fintech apps for budgeting, credit scores, insurance, and retirement savings are adopting these techniques. Some savings apps even give users virtual rewards for meeting goals, and credit score apps use progress metres and celebratory graphics when your score improves. The gamification trend extends to health insurance with wellness challenges, education through learning apps with points and leaderboards, and workplace productivity tools, all borrowing from what video games have perfected about engaging users.

Importantly, gamification isn’t confined to finance. Across industries, companies are leveraging game mechanics to drive customer behaviour and loyalty. Retail and e-commerce apps frequently incorporate mini-games or daily rewards. China’s e-commerce giant Temu and its rivals are known for offering in-app games that reward users with coupons or credit. Food delivery services might have challenges, such as “order 5 times this month for a bonus!” Fitness apps turn exercise into a game with badges for milestones and social competitions for steps taken.

By 2025, the global gamification market, which refers to the business of software and services that help companies gamify experiences, is projected to reach $30 billion, up from just $9 billion in 2020. In fact, a Gartner report found that over 70% of Global 2000 companies have implemented gamification in some form. The rationale is simple: engagement. In an age of short attention spans, techniques honed in video games are gold for keeping users interested and active.

The future is playable

In little more than a decade, gaming’s reputation has transformed from a frivolous pastime to a formidable economic force. The innovations born in the gaming world, such as virtual currencies, digital goods, live-stream engagement, and gamified apps, are now reshaping finance and business strategies at large.

Gaming has taught industries how to engage users and monetise digital experiences through creativity and interactivity. It has been shown that people will invest real value in virtual experiences, whether buying a skin for their character or spending hours honing skills to compete online.

For gamers themselves, the lines between playing for fun, earning a living, and investing have blurred. A teenager streaming gameplay from their bedroom might be building a lucrative personal brand. A clan of gamers spending real money on virtual real estate might see it as a serious investment in the next digital frontier. And an average person using a budgeting app with gamified features is essentially playing a serious game to improve their finances. Gaming has made economics more playful and play more economically significant.

Looking ahead, we can expect the interactive, engaging, and user-centric principles of gaming to increasingly inform mainstream business. As one industry observer quipped, “the future of business will be where the world is your playground.”

In practical terms, this means more immersive marketing, more interactive customer experiences, and business models that reward loyalty and engagement the way games do. We may see the day when quarterly earnings calls discuss user engagement levels and player retention strategies just as often as they do revenue, which is something that is already happening in certain sectors.

One thing remains certain. The ascent of gaming from niche entertainment to economic titan is a story still in progress, with new chapters being written in real time. Whether through the expansion of virtual reality metaverses, the integration of game theory into everyday apps, or the emergence of yet-unimagined digital assets, the influence of gaming on the market will continue to grow.

Companies and investors who understand the importance of play, along with the community and creativity it brings, are more likely to succeed in today’s world. In the gaming industry, those who welcome fresh and fun ideas are the ones who will do best.

The post The future of fun: Gaming goes mainstream appeared first on International Finance.

With 24/7 access to real-time transaction data, ranging from traditional securities and wire transfers to digital assets like cryptocurrencies, the ability to monitor and manage limits is not just a back-office function but a core competitive asset. Buying Power Hub offers a transformative approach to limit management, enabling banks, brokers, and other financial institutions to process and approve transactions in real-time.

High complexity is a challenge

The world of banking and finance is fast-moving and complex, and managing customer buying power is a core task. Financial institutions need smart software, specifically a solution that captures every transaction across all trading and payment platforms. It must calculate accurate buying power and push real-time updates to connected systems. The result? Fully synchronised buying power. Instantly.

Smart software, real-time control

Tracking all transactions and synchronising buying power in real-time is only the first step. To stay competitive in the modern financial environment, banks and financial institutions need more, such as intelligent software that provides full visibility and control without delay, without friction, without any compromises. Let’s break down what future-ready buying power management software should deliver.

Monitor every transaction

Efficient buying power management starts with full coverage. Modern software must handle institutional and retail clients within a centralised but logically separated system.

Handle data streams without downtime

Continuous 24/7 trading and payment can’t afford downtime. That’s why rolling upgrades are essential. Instead of traditional version updates with full system restarts, modern platforms roll out new features incrementally.

Synchronise changes instantly

Financial activities and changes must be reflected immediately in all relevant systems. Real-time synchronisation with core banking platforms ensures accuracy and eliminates the lag caused by batch updates.

Customer and counterparty control

A modern system must be flexible. It should allow dynamic limit fine-tuning (automated or manual). For example, transactions typically exceeding limits can be approved under special conditions.

Detect risk factors in real-time

Speed is critical when the buying power is exceeded. The software should immediately flag overdrafts and present them clearly to front-office or risk management teams.

Scale under pressure

High volumes must not lead to system failures. Cloud-native solutions with horizontal scalability ensure that additional computing power can be deployed instantly as traffic spikes.

Ensure seamless integration

Flexibility is key to adoption. The software must work independently of specific systems and support modern interfaces such as Apache Kafka. At the same time, institutions with legacy environments like Websphere MQ or flat-file structures must be able to integrate via adaptors.

Numerous Advantages

Intelligent software enables banks and financial institutions to manage customers’ purchasing power in real-time, across all asset classes from securities to cryptocurrencies. Financial institutions have full control over their counterparty limits, which are updated in real-time across all asset classes traded on various systems.

By integrating cross-system transaction monitoring, real-time synchronisation, and flexible limit management, institutions can streamline processes, minimise risk, and approve transactions instantly. Cloud-native, platform-independent architectures with rolling upgrades ensure continuous availability, scalability, and compatibility with modern and legacy systems.

When banks rely on modern software solutions, they quickly reap many benefits—for example, real-time updating, risk minimisation and fraud prevention, efficient data processing, and dynamic limit adjustment. Centralised limit control management will also be a relief for risk and compliance management, since they have fewer systems to monitor at the same time, but a consolidated view across clients and counterparties.

In view of increasing regulatory requirements and growing complexity in trading, banks should therefore quickly implement solutions that make existing processes more efficient.

The post Empowering real-time buying in modern financial markets appeared first on International Finance.