For more than four decades, Sibos has been where the global banking community takes the pulse of the industry and sets its next agenda. In 2025, the conversation has a distinctive edge: decentralised finance (DeFi) is moving from the margins to the mainstream. With Sibos taking place in Frankfurt from 29 September to 2 October under the theme “The next frontiers of global finance,” the tone is unmistakable—incumbents, fintechs, and market infrastructures are no longer debating if DeFi matters; they are asking how to harness it safely, interoperably, and at scale.
The shift is not just rhetorical. Conference tracks and boardroom side meetings are centring on tokenised deposits, real-world assets (RWAs), stablecoins, CBDCs, on-chain FX and securities settlement, and the compliance rails that must sit beneath them. The result is a pragmatic blueprint for the fusion of TradFi and DeFi that can upgrade cross-border payments, collateral mobility, and capital markets plumbing. The stakes are high: trillions in value flow through legacy rails that are too slow, too opaque, and too expensive for a digitised economy. If DeFi’s programmable liquidity, atomic settlements, and 24/7 markets can be married with bank-grade risk controls, the financial ecosystem changes—quietly at first, then all at once.
This article unpacks why Sibos 2025 is widely expected to be the tipping point. We explore the drivers of adoption, the regulatory scaffolding, advances in interoperability, and the operational playbook banks will need to compete. We also examine how tokenisation is transforming asset servicing and how CBDCs may interact with DeFi protocols and private stablecoin arrangements. Finally, we outline a realistic roadmap for implementation and the KPIs that matter.
Why Sibos 2025 is different
Sibos has always been a forward-looking forum, but 2025 adds three catalysts that make institutional DeFi inevitable rather than aspirational.
A maturing stack and credible scale
Over the past two years, pilots matured into production-ready modules. Custody-as-a-service can now handle multi-chain assets with policy engines for approvals and whitelisting. On-chain identity has become usable through verifiable credentials, bringing KYC/AML into smart contract logic. Oracle frameworks and event streaming connect on-chain actions to off-chain accounting and risk systems. Critically, tokenisation platforms now support programmable cash leg settlement using tokenised deposits, walled-garden stablecoins or wholesale CBDC test environments, enabling near-instant DvP and PvP.
Banks are not starting from scratch. They are building on standard messages and reference data while testing ISO 20022-native workflows designed for tokenised assets. The 2025 agenda—spanning AI, quantum, digital assets, payments and securities—signals that the tooling is converging on something deployable, not just demonstrable.
A regulatory path that prioritises controls, not labels
The regulatory lens has shifted from whether something is “DeFi” to whether it is safe, transparent and supervised. That means permissioned smart contracts, auditable code releases, segregated key management, and robust investor protections. Instead of fighting the label, leading banks are embracing RegTech patterns—continuous code attestation, embedded travel rule compliance, on-chain reporting and circuit breakers—to bring the discipline of market infrastructure into DeFi-like architectures.
Interoperability has moved from theory to practice
Perhaps the most important enabler is interoperability across chains and networks. Message-based approaches that coordinate actions across permissioned and public chains, combined with token bridges designed for institutions, are reducing fragmentation. Industry bodies and market infrastructures are aligning on common interoperability standards so that a tokenised bond on one network can settle against tokenised cash on another without bespoke integrations. The Sibos programme explicitly foregrounds interoperability and cybersecurity, underscoring its centrality to real-world deployment.
DeFi expected to take over the financial ecosystem
Takeover does not mean displacing banks. It means DeFi design patterns—composability, transparency, programmability, and 24/7 settlement—are becoming the default way value moves, while regulated institutions provide governance, credit intermediation, and risk management. The end state looks like Finance over Smart Contracts (FOSC): bank-supervised liquidity that is programmable and interoperable, with user protection as a first-class feature.
The adoption curve: from pilots to platforms
Banks typically traverse four steps:
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Observation and education where risk teams, compliance and auditors upskill on smart contract risk and wallet security.
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Sandbox pilots for internal use cases: automated treasury sweeps with tokenised cash, on-chain collateral mobility between a bank’s own desks, and tokenised commercial paper funded with tokenised deposits.
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Client-facing pilots in closed networks: RWA issuance for selected corporates, same-day repo against tokenised collateral, or on-chain FX for treasury clients during defined windows.
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Scaled platforms offering 24/7 services—cross-border payments with atomic PvP, syndicated loans with real-time waterfall distributions, and corporate cash management where programmable rules manage liquidity across currencies.
By Sibos 2025, many global players are straddling steps three and four, with agendas highlighting tokenised assets, stablecoins, and CBDCs as near-term focus areas.
The building blocks: tokenised money, identity and compliance
Tokenised forms of money: deposits, stablecoins and CBDCs
Institutional DeFi needs dependable tokenised money. Three models are taking shape:
Tokenised deposits are claims on a commercial bank, minted and burned against core systems. They bring bank-grade compliance and resolution regimes. Programmability makes them powerful for corporate workflows—escrow, conditional payments, and dynamic supplier financing.
Permissioned stablecoins are fully reserved tokens issued on permissioned or allow-listed public networks. They offer cross-bank interoperability when tied to standardised reserve attestations and on-chain proofing. Expect them to dominate early cross-border corridors where settlement risk is the bottleneck.
Wholesale CBDCs remain experimental but promising. They can power atomic DvP in securities settlement and improve liquidity optimisation across central bank money and commercial bank money. As pilots advance, expect CBDC networks to interoperate with commercial tokenised money through standardised messaging and orchestration layers—an area prominent on the 2025 agenda.
On-chain identity and policy controls
DeFi in banks must be selectively open. Verifiable credentials allow KYC’d entities to prove attributes without revealing raw data. Smart contracts enforce allow-lists, geofencing, investor type restrictions and transaction caps. These controls make it possible to capitalise on DeFi’s transparency while complying with AML, sanctions and market conduct rules.
Embedded compliance, auditability and risk
Auditors and supervisors need a glass box, not a black box. Institutions are adopting four mechanisms:
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Deterministic policy engines that evaluate every on-chain transaction against internal rules.
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Immutable logs that link transaction hashes to human-readable records for audit trails.
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Live risk dashboards that aggregate wallet exposures, counterparty limits and smart contract TVL across networks.
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Kill-switches and circuit breakers to pause flows under stress, with governance rules encoded and tested in advance.
The killer apps: where DeFi delivers tangible value
Cross-border payments and treasury
Cross-border flows remain slow and costly due to time-zone cut-offs, nested correspondent chains and complex compliance. DeFi-style rails paired with tokenised money can deliver near-instant PvP, continuous netting and straight-through compliance checks. Corporates gain programmable treasuries that sweep idle cash into tokenised MMFs or time-locked deposits and release funds automatically on delivery, inspection or IoT triggers.
Securities issuance, settlement and asset servicing
Tokenisation compresses timelines and operating costs in capital markets. Primary issuance benefits from shared cap tables and automated allocations. Secondary markets gain T+0 settlement under proper risk controls, with optional netting schedules to manage liquidity. Asset servicing—coupons, dividends, voting—becomes event-driven and programmable, reducing reconciliations and exceptions. This aligns with Sibos’ focus on tokenised assets and securities in 2025.
Collateral mobility and intraday liquidity
In today’s markets, collateral is trapped in silos. With on-chain title transfer and programmable liens, firms can mobilise assets across entities and time zones in minutes. Smart contracts support conditional rehypothecation and auto-margining, with real-time visibility for risk and compliance.
Trade finance and supply chain
Digitised documents and IoT data integrate with smart contracts to enable conditional payments, automated document checking, and tokenised receivables marketplaces. Banks can offer dynamic discounting priced off real-time risk signals, not static credit scores.
Interoperability: the linchpin of institutional DeFi
If every bank implements its own island, we repeat the mistakes of the past. Interoperability is therefore the industry’s central project.
Messaging-first orchestration
Rather than pushing every institution onto the same blockchain, orchestration layers coordinate multi-network actions: mint cash here, lock collateral there, release assets on confirmation. These layers translate between on-chain events and ISO 20022 messages so core banking and custody systems stay aligned. Interoperability is a headline theme at Sibos 2025, with sessions on payments, FX, and digital assets exploring precisely these models.
Secure bridges for permissioned and public networks
Institutional bridges require fault-tolerant validation, multi-party key control and continuous monitoring. The design goal is to eliminate single points of failure and introduce governable rollback in the event of exploits. Recent announcements at Sibos underscore how industry players are pushing towards production-grade interoperability for tokenised finance, reflecting growing confidence in the model.
Risk, resilience and governance
Smart contract risk management
Every contract is code, and every codebase has bugs. Banks are addressing this with multi-layered assurance: formal verification for critical modules, mandatory independent audits, and runtime monitors that detect anomalous behaviour. Controlled upgrade paths with time-locks and public attestations balance agility with safety.
Custody and key management
Institutional custody hinges on MPC and HSM architectures with policy-based approvals, segregation of duties and disaster recovery. Hardware-backed wallets for operators, plus strong transaction screening, reduce the risk of phishing and signing fraud.
Operational resilience and cyber
DeFi introduces new attack surfaces. Institutions are aligning with DORA-style frameworks for resilience, including chaos exercises on smart contracts and bridges, table-top incident simulations, and shared threat intel across industry groups. Sibos’ emphasis on cybersecurity in 2025 reflects how crucial this is for adoption.
Also Read : Best Automated DeFi Trading Bot Services Complete Guide 2025
Regulation clarity, convergence and competitiveness
Regulatory clarity has improved markedly, with supervisors signalling openness to tokenised business models that preserve consumer protection and financial stability. The direction of travel is consistent:
Same risk, same regulation. If a token functions as money or a deposit, it must live under equivalent prudential and conduct standards.
On-chain compliance by design. Policies must be enforceable in code, not just in manuals—think sanctions screening, wallet risk scoring and suspicious activity triggers embedded in transaction flows.
Transparency and reporting. On-chain data can power near-real-time regulatory reporting, shrinking the gap between events and oversight.
Sibos is a venue where supervisors, central bankers and industry leaders exchange views, and 2025’s focus on CBDCs, stablecoins and tokenised assets indicates an appetite to align on workable standards rather than rigid prescriptions.
Business models: where banks win in a DeFi-infused world
Platform fees and balance sheet alpha
Banks can monetise tokenisation platforms as network utilities while still earning traditional spread income from financing and market-making. Tokenised deposits deepen stickiness and lower operational costs; programmable escrow and real-time FX capture fee pools currently owned by intermediaries.
Data advantage and client experience
On-chain transparency creates high-fidelity telemetry. Banks that invest in analytics can offer superior risk insights, dynamic pricing and personalised treasury automation. The client experience becomes API-first, with configurable workflows that adapt to each corporate’s supply chain, tax and treasury rules.
Ecosystem collaborations
Partnerships with fintechs and web3 specialists enable faster product cycles while maintaining bank-grade governance. Global institutions are already showcasing their Sibos 2025 speaker rosters and collaboration agendas, signalling momentum behind ecosystem-based delivery models.
Operating model: the DeFi-ready bank
Governance that matches the technology
Create a cross-functional Tokenisation & DeFi Council spanning treasury, markets, payments, legal, compliance and cyber. Give it authority over smart contract standards, deployment gates, vendor selection and risk policies. Publish service-level objectives for on-chain services just like core payments systems.
Technology architecture
Adopt a hub-and-spoke architecture: a tokenisation hub connected to multiple networks through interoperability layers, flanked by a key management tier and a compliance orchestration tier. Integrate with core banking via event streaming and message queues, not brittle point-to-point links. Use reference environments—golden testnets mirroring production—for rehearsal.
People and skills
Upskill risk teams in smart contract literacy. Bring DevSecOps into finance through continuous integration and continuous control monitoring. Incentivise product managers to think in composable primitives—escrow, conditional transfers, rights management—rather than siloed products.
The DeFi roadmap for 2025–2027
Foundations (0–6 months)
Define tokenised money strategy, starting with tokenised deposits and a policy for interacting with permissioned stablecoins. Establish custody with MPC and policy engines. Launch an internal pilot—such as intraday liquidity management—to validate controls and performance.
Client pilots (6–18 months)
Offer select clients tokenised commercial paper, repo or cross-border treasury payments. Connect at least two interoperability routes—one permissioned network and one allow-listed public chain. Start measuring time-to-settle, fail rates, cost per transaction and liquidity savings.
Scale and productisation (18–36 months)
Turn pilots into products with SLAs, pricing and support. Expand into asset servicing and trade finance. Integrate AI to automate reconciliation, anomaly detection and client reporting. Align with evolving standards and host city rotations that keep the ecosystem global—Paris in 2028 and Dubai in 2029 are already on the horizon as future Sibos hosts, underscoring the worldwide nature of this transition.
Measuring success: KPIs that matter
Settlement speed and reliability. Track median and 95th percentile settlement times, plus on-chain fail rates and revert causes.
Liquidity efficiency. Measure reductions in collateral buffers and intraday credit lines required to support the same volume.
Operational cost per ticket. Include compliance, reconciliation and exception handling. On-chain automation should compress manual hours.
Client adoption and retention. Monitor active wallets, programmable treasury usage and cross-sell into FX, lending and cash management.
Risk posture. Quantify smart contract coverage by verification and audits, incident MTTR, and control effectiveness in quarterly testing.
Outlook: from islands to an internet of value
Sibos 2025 captures a moment when the global financial system is ready to absorb the best of DeFi without compromising safety. The metaphor that fits is the early internet. At first, enterprises built intranets; only when standards matured did they open up to the internet proper. Finance is repeating this playbook: start with permissioned, compliant networks; use strong identity and policy layers; then carefully interoperate with broader ecosystems where it is beneficial and safe.
The outcome is not a world where banks vanish. It is a world where banks become programmable platforms for money and markets, where tokenised assets and tokenised cash move with certainty, where risk is observable in real time, and where cross-border commerce becomes as fluid as data. That is why so many expect DeFi to take over the financial ecosystem—not by overthrowing it, but by upgrading it.
Conclusion
The headline from Sibos 2025 DeFi is clear: DeFi is no longer an experiment. The combination of tokenised money, robust on-chain compliance, interoperable networks and pragmatic regulation enables banks and market infrastructures to industrialise what began as a set of open-source ideas. If incumbents act with discipline—building governance commensurate with the technology—they will capture new revenue, deepen client relationships and reduce structural costs. The prize is a financial system that is faster, more transparent and more resilient. In short, DeFi takes over by making traditional finance better.
FAQs
Is DeFi really compatible with bank regulation?
Yes—if implemented with permissioned smart contracts, strong identity, policy controls, and auditable processes. Supervisors increasingly focus on outcomes—safety, transparency, and consumer protection—rather than labels. Embedding compliance in code is how banks make DeFi patterns compatible with regulatory expectations, a theme emphasised in the Sibos 2025 programme on digital assets, payments, and securities.
What form of tokenised money will win: deposits, stablecoins or CBDCs?
All three will coexist. Tokenised deposits are ideal for bank-led workflows; permissioned stablecoins are useful for interbank and cross-border corridors; wholesale CBDCs can improve atomic settlement in securities markets. The right mix depends on jurisdiction, corridor and use case, a point under active discussion at Sibos 2025.
Do we need a single blockchain standard for institutional DeFi?
No. The dominant pattern is interoperability—messaging-first orchestration that lets assets and cash interoperate across networks while maintaining local controls. The goal is common interoperability standards rather than a single chain, reflecting headline topics at Sibos 2025.
How do banks manage smart contract and bridge risks?
Through layered assurance: formal verification for critical code, independent audits, runtime monitoring, staged upgrades, and multi-party governance. Bridges must use fault-tolerant validation and strong key controls. Recent industry updates at Sibos highlight progress toward production-grade interoperability and governance.
What’s next after Sibos 2025?
Expect 2026–2027 to be the scale-up phase: tokenised cash management, repo, and RWA markets will move from pilots to products, while standards converge. The Sibos roadmap—Miami in 2026, Singapore in 2027, Paris in 2028 and Dubai in 2029—signals a global push to embed these capabilities in every major financial centre.
