By Navin Sregantan
If you’ve only got a minute:
- Digital assets are the representation of resources that are issued and transferred using distributed ledger or blockchain technology.
- Some benefits of blockchain technology include greater transparency, enhanced security and traceability of data.
- Examples of digital assets using distributed ledger or blockchain technology include cryptocurrencies, NFTs and CBDCs.
Digital assets have become a hot topic in recent years, drawing considerable interest for their increasing value and growing use cases.
Traditionally, digital assets refer to content or resource stored digitally like videos or documents. Today, a more specific and relevant definition refers to assets issued and transferred using distributed ledger technology (DLT), particularly blockchain.
Blockchain itself has become a buzzword, largely due to the surging interest in cryptocurrencies like Bitcoin and Ethereum, which have not only reshaped financial discussions but have also become an area of interest for many for investors.
While blockchain technology can seem complex, the core concept is straightforward. It is essentially a database that uses a vast network of computers to simultaneously verify data on a digital ledger. This distributed approach ensures data is stored securely across the network and cannot be tampered with, offering benefits like greater transparency, enhanced security, and improved traceability.
Beyond cryptocurrencies, the digital asset landscape includes other significant developments like Central Bank Digital Currencies (CBDCs) and Non-Fungible Tokens (NFTs).
Cryptocurrency
Cryptocurrencies, like Bitcoin and Ethereum, are still the most talked-about digital assets even though the world of cryptocurrencies has expanded exponentially.
The term "crypto" refers to the advanced cryptographic techniques used to secure transactions and verify ownership across this network. The "currency" aspect signifies their design as an electronic system of money, intended to serve as a medium of exchange, a unit of account, and a store of value.
Unlike conventional monetary systems, this decentralised structure means no single authority dictates their operation or the issuance of new units.
As of August 2025, the global cryptocurrency market capitalisation stood at just under US$4 trillion. Beyond Bitcoin and Ethereum, the ecosystem has diversified, now including altcoins, stablecoins (pegged to fiat currencies), and tokens for new areas like Decentralised Finance (DeFi) and Web3 applications.
DeFi offers blockchain-based financial services like lending and trading without intermediaries. Web3 envisions a decentralised internet giving users more data control, with DeFi being a key component.
A notable development in the past couple of years has been the regulatory approval of spot Bitcoin Exchange-Traded Funds in major markets, which has broadened institutional access.
For cryptocurrencies to achieve widespread adoption as a payment method, similar to established fiat currencies, broader acceptance remains a critical factor.
Read more: Beginner’s guide to cryptocurrency
Central Bank Digital Currencies (CBDCs)
A CBDC is essentially a digital form of a country's fiat currency, like the Chinese Yuan or Singapore Dollar, issued and managed by its central bank. Unlike cryptocurrencies, CBDCs are designed to be centralised, regulated, and stable, directly reflecting the value of their physical currency equivalent.
Although CBDCs might utilise DLT, which could be a blockchain or an alternative, to process transactions, they remain a direct liability of the central bank. This allows central banks to retain control over the money supply, just as they do with physical cash.
CBDCs are broadly categorised as retail, for public use, and wholesale, for interbank use.
The global interest is significant. In 2024, a Bank for International Settlements (BIS) survey revealed nearly 94% of central banks are engaged in some form of CBDC work, with many moving beyond research into development or pilot phases.
For instance, China has expanded its digital Yuan trials to wider public participation, and projects like the Monetary Authority of Singapore's work on multi-CBDC models highlight innovative cross-border applications. Nigeria launched its eNaira in 2021, becoming one of the first countries to issue a live CBDC.
This widespread exploration underscores a global trend towards modernising financial systems, adapting to declining cash usage, and ensuring monetary stability in an increasingly digital world.
As a whole, there are a number of key drivers and benefits of CBDCs.
These digital complements to physical cash are being explored to modernise financial systems, adapt to declining cash usage, and ensure monetary stability in an increasingly digital world.
Despite this global momentum, no major advanced economy has yet fully launched a widely available retail CBDC, though progress is undeniable.
Read more: What are alternative investments?
Non-Fungible Tokens (NFTs)
Another class of digital assets, NFTs are distinguished by their uniqueness. Each NFT is a verifiable entry on a blockchain, representing ownership of a specific digital or real-world item.
This contrasts with fungible assets, like fiat currency (e.g., Singapore Dollar) or cryptocurrencies (like Bitcoin), where any unit holds the same value as another.
For instance, you can swap a S$10 note for another, or one Bitcoin for another, without any change in value. An NFT, however, is singular. It acts as a verifiable digital certificate of authenticity and ownership for a specific asset, recorded and secured on a blockchain (commonly Ethereum).
This mechanism leverages smart contracts and metadata to establish immutable provenance and transparency, addressing issues of authenticity and ownership often found in traditional markets like art or collectibles. Initially, NFTs gained prominence in digital art, music, and collectibles, primarily traded on dedicated marketplaces using cryptocurrencies.
Since the peak speculative fervour in late 2021 and early 2022, the NFT landscape has matured. While still prominent in digital art and collectibles, the focus has shifted towards more practical, programmatic applications.
NFTs are both programmable and portable. For example, an NFT representing a concert ticket could evolve into a backstage pass or grant access to exclusive merchandise, with royalties potentially flowing back to the original creator.
This underlying technology's transparency also disintermediates traditional middlemen, potentially allowing creators and buyers to retain a larger share of value.
Despite market fluctuations, NFTs continue to explore diverse applications across sectors like gaming, intellectual property rights, ticketing, and real-world asset tokenisation, signifying a move beyond purely speculative ventures.
In summary
The digital asset landscape, rooted in distributed ledger technology like blockchain, has rapidly evolved beyond its initial association with cryptocurrencies such as Bitcoin and Ethereum.
It now encompasses diverse applications, from the unique digital ownership offered by NFTs – which are maturing beyond speculation into practical uses – to the strategic development of CBDCs by nearly all central banks aiming to modernise financial systems and maintain monetary stability.
Despite persistent market volatility and evolving regulatory challenges, this burgeoning ecosystem signifies a fundamental shift in finance, promising greater transparency, security, and efficiency, and fundamentally reshaping how we perceive and interact with value in an increasingly digital world.
