Will digital finance redraw the global financial map?

Beyond MiCA, Part 2 of 3

At a time when global regulation for digital assets is fragmented, Europe has achieved something significant with its Markets in Crypto-Assets (MiCA) regulation. It has created a harmonised framework across a large economic market. That combination of regulatory clarity and cross-border market access is valuable to multinational crypto-asset service providers.

Markets outside Europe are also strengthening their digital finance frameworks and positioning themselves as attractive centres for digital asset and tokenisation activity. When global businesses must be selective over where they commit limited resources, specialist talent, and management attention, the differences between markets will shape where firms invest and scale.

Over time, if credible regulated access spreads across major financial markets, factors outside of regulation will become more important in determining where firms choose to grow.

This raises a question that goes beyond today’s regulatory race and matters directly to Europe’s longer-term position: will digital finance redraw the geographic map of global finance, or ultimately reinforce the one that exists now?

Market access is only the starting point in digital finance

The value of regulatory access depends on what a market allows a firm to reach. For example, a consumer platform may gain the ability to tap into millions of customers, while an institutional business may unlock potential investors, assets, transaction volumes, or counterparties.

As multinational firms progressively expand their global footprint, the order of market entry makes a difference. Each new regulatory commitment requires resources, so firms should prioritise markets where that investment opens up the strongest addressable commercial opportunity — whether through customers, capital, liquidity, institutions or financial activity — and broadens their client base.

In Europe, MiCA enables businesses to operate across multiple countries under a common regulatory framework, providing access to a large combined market. Other major financial markets, meanwhile, offer different propositions:

United States: Combines substantial commercial scale with deep pools of capital and liquidity, making it attractive to institutional firms, exchanges, and asset managers.
United Kingdom: Offers a sizeable domestic market alongside London’s established role in international and wholesale finance, appealing to firms serving cross-border institutional clients.
Singapore and Hong Kong: Pair domestic markets with strong regional influence, presenting firms with a gateway to Asian investors, institutions, and cross-border capital.
Dubai: Uses regulation and targeted policy to build an international digital-asset hub, giving global firms a base for serving clients and markets across the region.

While it’s important to select a market with a strong commercial opportunity for initial entry, that market may not always be the best place to build long-term. As firms grow, they also need to consider which markets can support scale and where institutions and expertise are likely to concentrate over time. Traditional finance offers a useful reference point for how that could unfold.

What traditional finance tells us about the future of digital assets

Financial services are widely available across developed economies, but financial activity has never become evenly distributed. Instead, financial centres developed different strengths, such as New York with capital markets or Luxembourg and Dublin with funds and asset servicing.

These positions have endured through globalisation and technological change because their advantages extend beyond regulation. Capital, liquidity, infrastructure, institutions, and specialist expertise compound one another. Institutions attract talent and professional services, infrastructure attracts participants, and liquidity attracts further liquidity. This creates market capabilities that are difficult to reproduce elsewhere.

Digital finance could alter those dynamics. Its cross-border nature can reduce existing frictions, change financial value chains, and create opportunities for jurisdictions that historically played smaller roles in global finance. History is therefore a useful reference point, not a predetermined outcome.

But technological change does not fully remove the advantages associated with financial depth. Market capabilities remain economically relevant even as the technology through which financial activity takes place evolves.

Digital finance may thereby reshape both the architecture and geography of finance, although not necessarily to the same degree. Existing financial centres are not guaranteed to dominate, but their accumulated strengths may still give them an important advantage as the industry develops.

Different starting positions in the same global market

Viewed through this lens, the major markets enter digital finance with different advantages.

As mentioned, Europe combines regulatory harmonisation with a strong market-access proposition. The challenge is converting regulatory certainty and scale into deeper liquidity, institutional participation, and specialised digital-finance capabilities.

The United States, in comparison, starts from almost the opposite position. Its framework has developed less uniformly than Europe’s, although important parts have advanced. What it already possesses is much harder to create through regulation: exceptional capital-market depth, institutional participation, liquidity, and commercial scale.

Meanwhile, the United Kingdom is developing its regulatory framework and has existing strengths in wholesale finance, capital markets, asset management, and professional services. This gives digital asset firms access to an established network of expertise and international clients.

Dubai provides perhaps the clearest test of a different model. The question is whether its regulatory and innovation leadership can attract enough activity to build liquidity, infrastructure, institutional connectivity, and specialist expertise despite a smaller domestic market.

Singapore and Hong Kong offer other routes. Both already possess established financial-centre capabilities and are deliberately seeking to extend those strengths into digital finance.

As a result, these markets are starting from different positions in the competition for a durable share of global financial activity. Their relative importance is likely to change as the market matures.

The real competition is conversion

Regulatory leadership can attract firms, and a large market can attract customers, but neither creates a durable financial centre by itself. The harder task is conversion: turning those initial advantages into capabilities that become difficult to replicate elsewhere.

Traditional finance shows how this process can become self-reinforcing. Once activity reaches sufficient scale, network effects can turn early advantages into capabilities that are increasingly difficult to reproduce. Digital technology may change the mechanics and remove some barriers, but it does not follow that these capabilities cease to matter.

This creates opportunities for incumbents and challengers alike. Established centres may find that capabilities accumulated over decades remain valuable as digital finance matures. Emerging centres, meanwhile, have a rare window in which regulatory clarity and innovation can attract activity before competitive positions become more established.

Digital finance is likely to reshape the existing financial landscape, with established centres retaining important advantages while selected challengers gain ground where they successfully convert early regulatory, commercial, or technological leadership into lasting financial capability.

The global regulatory race may determine where digital finance goes first, but not where it ultimately stays.

Final takeaways: from market entry to long-term positioning

In the near term, international expansion is partly about sequencing. That means identifying where the next investment in regulatory access, people, and infrastructure unlocks the greatest incremental commercial opportunity. While regulatory regimes remain materially different, those differences can legitimately influence the order in which markets are entered.

Longer-term positioning requires a different approach. Boards will need to assess where the strongest financial ecosystems are developing and which capabilities matter most to their business model. The market offering the strongest case for entry today need not be the market in which a business ultimately builds its deepest capabilities. By taking a phased approach, they can start by capturing commercial opportunities as markets open and retain flexibility over where to concentrate investment.

For Europe, MiCA provides a meaningful starting position, but not a guarantee of long-term leadership. The question is whether regulatory clarity and access to a large market can be converted into commercial scale, institutional participation, liquidity, infrastructure, and genuine financial specialisation.

The clearest sign that the digital finance industry has matured will come when jurisdictions stop competing to become crypto hubs and start competing for digital finance much as they compete for finance today. By then, the decisive question won’t be which market regulated first, but which one succeeded in turning this period of rapid change into something that lasts.

The final part of the Beyond MiCA series looks at how digital finance could change the way financial services are structured and what that means for financial institutions, digital asset firms, and their boards.