One Chain to Rule Them All: Tech-Driven Convergence of Financial Instruments in a Fragmented Regulatory Landscape

ABSTRACT 

Financial regulation rests on a mid-twentieth-century taxonomy in which money, securities, commodities, deposits, and fund shares are legally distinct, each governed by a separate authority. Modern technology has largely dissolved these boundaries. The current wave is driven by blockchain-based instruments, but the underlying dynamic is broader and will outlast the technology exposing it today. A stablecoin functions simultaneously as a payment instrument, a deposit-like claim, and a money-market-fund unit; a tokenized Treasury fund operates as a security, a fund share, and collateral at once. The policy response to date has been retroactive classification: the SEC-CFTC joint interpretation of March 2026 and the EU’s MiCA regulation redrew boundaries after a decade of uncertainty, but only for pre-existing instruments. This paper contends that classification alone cannot keep pace with financial engineering, which recombines the functions of money, securities, and commodities faster than any taxonomy can track them. The durable fix is structural: a unified regulatory lens, established through agency consolidation or a statutory umbrella body with binding authority. This applies globally, but Türkiye illustrates it with particular clarity: regulatory authority is split among the CMB, BRSA, CBRT, and MASAK without a standing mechanism for joint determination. Türkiye can build this architecture proactively, before volumes escalate, rather than the litigation-driven retrofit now under way in the United States.