Blockchain technology will completely disrupt the financial services industry, warned speakers at the Uncorrelated Cayman 2025 conference. And the Cayman Islands will have to adapt if it wants to remain one of the world’s top global financial centres.
Held at Hotel Indigo Grand Cayman from 9-11 Nov., the conference brought together international money managers, capital raisers and local financial players. There were a wide range of views, but one thing on which speakers agreed was that the financial services industry was on the brink of a tech-fuelled transformation.
“Disruption is coming in multiple ways,” said David Chapman, partner at Silver Mine Capital. One way is the growing adoption of cryptocurrencies, which are an alternative to traditional ‘fiat’ currencies and run on blockchain technology.
“The crypto market could grow from roughly US$4 trillion to US$100 trillion in four to five years,” Michael Bacina, deputy chair of the Blockchain Association of the Cayman Islands, and an attorney at NXT Law. “Much of that growth will be in the US and Europe and well-positioned offshore centres – like Cayman – stand to benefit significantly.”
Participants cited various examples, from the controversial Trump Coin to the issuance of stable coins linked to different currencies around the world, to demonstrate the growing adoption and uses of cryptocurrencies.
Tokenisation
But while cryptocurrencies grab all the headlines there are other blockchain applications that are quietly transforming how financial institutions operate.
“Tokenisation is ledger-based technology that makes things more efficient whenever something needs to be transacted,” said Douglas Spencer, founder of Monetaforge, a Cayman-based blockchain specialist. “Tokenisation goes beyond funds and portfolios and assets. It can be used for payroll, distributions of dividends, royalty payouts.”
It means back-end infrastructure for funds and banks can become faster and cheaper and by adopting blockchain technology. “Tokenisation’s been around for years, but only now are large financial institutions using it for transactions,” said Chapman. He cited the example of the Canton Network, a blockchain system used by large global banks like Goldman Sachs to settle trades and interact with other financial institutions.
Blockchain also helps with compliance, because it creates an unchangeable, time-stamped record of transactions on a ledger that can be shared with auditors and regulators.
“Cayman hosts tens of thousands of funds; they will be tokenised over the next five years,” said Bacina. “That’s an opportunity and a threat – like the early internet. Those who adopt safely will win.”
Blockchain won’t just help make existing funds more efficient, it will also lead to new ones. “That likely means increased fund formation, which Cayman can support,” said Chapman.
Regulation and ecosystem
The conference was full of jargon and buzz words as speakers debated the pace and nature of the coming blockchain disruption. Yet for the Cayman Islands, where financial services are the economy’s most important sector, this is more than just an abstract, tech discussion.
Cayman-based institutions manage approximately US$8.5 trillion in assets with more than 30,000 funds registered on the islands. Which means Cayman will be impacted by the blockchain disruption in a big way.
Regulation is the key to Cayman’s survival as a leading financial centre, said conference participants. To that end, Cayman passed the Virtual Asset Service Providers Act in 2020, which was amended in 2024.
“The VASP Act was early in lifting standards and moving [blockchain] beyond the ‘Wild West’ to supervised, regulated activity,” said Bacina. Spencer agrees that the VASP act helped bring legal clarity to the sector. “Monetaforge is a VASP in Cayman; it took almost a year, but the credibility matters.”
Noting that similar acts were also passed in Dubai, Singapore and the EU, Bacina said, “Cayman’s early start has created a deep expertise that’s hard to replicate.” Chapman agrees. “There’s willingness [in Cayman] to learn and move fast. You’re seeing talent move here –digital asset specialists, lawyers, innovators. Other jurisdictions are falling behind.”
But Cayman can’t rest on its laurels. The Ministry of Financial Services and Commerce recently held a consultation on how existing regulation should be amended to allow financial tokenisation on the islands. “Getting tokenisation laws right in the next 12 months is crucial, and it’s heartening to see government working closely with industry,” said Bacina.
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