2025 Outlook: Deregulation, Digitalisation and Disruption

As 2025 jumps off to a quick start and with plenty of change on the horizon, Philip Pirecki, Americas Lead at Jersey Finance, shares his thoughts.

13 January 2025

2025 stands at the crossroads of unprecedented change, where on-chain assets continue their march towards a projected $17 trillion market while regulatory frameworks struggle to keep pace with technological innovation.

This year emerges as more than just another turn of the calendar – it represents a fundamental restructuring of how the US government will operate, how capital moves around the world and how technology reshapes century-old financial systems. From the halls of a radically different Washington administration to the widespread integration of on-chain finance, the convergence of policy shifts and technological breakthroughs promises to redefine the very foundation of global commerce.

Radical regulatory rethinking

The incoming administration’s regulatory vision represents a dramatic shift from decades old frameworks and is expected to fundamentally transform the regulatory landscape, moving toward frameworks and modernised systems that are potentially more supportive to the alternative investment industry. By rethinking and recalibrating policies—through strategic deregulation, modernisation and then targeted re-regulation aimed at 2030 challenges rather than ones we faced in the 1930s.

A central party in this regulatory reinvention is the newly formed Department of Government Efficiency (DOGE), a presidential advisory commission that embodies the administration’s paradoxical approach to governance. Headed by Elon Musk and Vivek Ramaswamy—CEOs juggling leadership roles across multiple companies—DOGE’s mandate to streamline government operations presents its own irony: a new government department created to reduce government bureaucracy. While its power and responsibilities remain notably undefined, its impact could extend across sectors, particularly financial services.

Emerging sectors such as digital assets and tokenisation could gain much-needed clarity. Specifically, the digitalisation of real assets stands as a prime example, where regulatory clarity could accelerate adoption and unlock new efficiencies in traditionally illiquid markets, from real estate to private equity holdings. However, the effectiveness of these changes may depend heavily on how DOGE navigates its inherent contradictions and the complex relationship between its leadership’s private sector interests and public sector responsibilities.

Tariffs, taxes and thriftlessness: Trump 2.0

In addition, building on the themes of his first term, President Trump’s new administration appears poised to double down on its signature blend of tax cuts, spending expansion and protectionist policies. Tax reform and reshoring initiatives are expected to be central pillars of his agenda.

An extension of the Tax Cuts and Jobs Act could drive corporate tax rates down to 15%, incentivising domestic production. However, this is expected to coincide with significant increases in tariffs on foreign goods, purportedly to offset those tax cuts. The implications remain a subject of debate among economists, especially the irony of using tariffs—a form of taxation on consumers—to fund tax cuts for those consumers. This approach could create an unusual scenario where working-class Americans, many of whom have minimal federal tax liability, find themselves bearing the burden of higher retail prices due to tariff-induced cost increases. As the year unfolds, we may observe the practical limits of how far the new administration can push its global tariffs agenda.

On-chain and digital transformation

2025 is also shaping up to be a landmark year for blockchain technology and AI, as these innovations transition from experimental concepts to integral components of industry infrastructure. Institutional adoption of blockchain is gathering momentum, with applications extending beyond digital assets and cryptocurrencies to streamlining financial operations and modernising capital market infrastructure. The projected on-chain assets of $17 trillion by 2030 only tell part of the story. The real transformation lies in how these technologies are reshaping core market operations from settlement to operations to distribution.

Thus far, most blockchain solutions are focused on the digital assets space yet, over the next year, we expect to see those solutions and industry capabilities facilitating more efficient operations. The benefits of blockchain—cost reduction, speed, and enhanced transparency—are driving its adoption across industries. As allocators begin to experience its practical advantages, the demand for digital solutions is likely to accelerate. After all, you don’t know what you’re missing until you have it.

Location plays a role in this transformation. The evolution of on-chain adoption varies significantly across jurisdictions, with some leading the charge in creating robust frameworks for digital asset solutions. Jersey for instance, has emerged as a pioneer in this space, having established clear regulatory guidelines for digital assets as early as 2014 and more recently, last year, the introduction of a real asset tokenisation framework has further strengthened its position. Its approach combines innovation friendly policies with strong regulatory oversight. This model of balanced regulation has attracted significant institutional interest.

As jurisdictions like Jersey adapt their regulatory frameworks, a parallel transformation is taking place. Legacy financial systems are undergoing the most comprehensive, and much-needed, overhaul since the 1970s, Real-time treasury capabilities, open banking and API integrations are becoming the new baseline, not the exception. This modernisation ensures that financial institutions are breaking free from the constraints of siloed systems and manual processes. This transformation has gained additional complexity with quantum computing advancements threatening traditional cryptographic security, forcing institutions to simultaneously modernise their operations while future-proofing their security infrastructure against quantum threats.

Simultaneously, and perhaps most significantly, artificial intelligence is evolving from a theoretical tool into a practical catalyst for efficiency and innovation. From automating routine tasks to enhancing strategic decision-making, AI integration is redefining operational standards. The machines aren’t taking over; they’re just making traditional processes look unnecessarily slow and cumbersome.

Final thoughts

As 2025 unfolds, we face a landscape of deliberate contradictions: a new department created to reduce government, tariffs imposed to offset tax cuts and traditional financial systems racing to embrace blockchain while operating on 1970s infrastructure. Yet perhaps the greatest irony lies in where stability and predictability can be found. Jurisdictions like Jersey are increasingly valuable partners in this complex environment. Jersey has made adaptability its constant, demonstrating that predictability comes not from resistance to change, but from actively wrestling with and navigating these paradoxes. Businesses, investors and managers that can similarly navigate this transformative era with agility and foresight, while anchoring themselves in stable adaptive jurisdictions, will find opportunities in the complexity. By strategically embracing these shifts, they can position themselves to capitalise on the opportunities ahead and thrive in the coming year. Those waiting for perfect clarity may find themselves watching from the side lines as the financial system undergoes its most significant reformation in decades.