Institutions Won't Adopt DeFi Until It Evolves to Meet Their Needs
Talk of institutional adoption of DeFi has been picking up pace in the last couple of years, but whereas before, the main conversations focused on matters of regulation, these days greater emphasis is being placed on infrastructure. And rightly so, in my opinion.
It is certainly true that institutional actors prefer as much legal clarity as possible when engaging with financial instruments and systems of any kind. But it’s not enough to simply assume that once governments introduce clearer rules, banks and asset managers will instantly move on-chain with no hassle. In practice, it doesn’t quite work that way.
As things stand now, regulatory initiatives like the CLARITY Act in the United States, alongside the SEC's work on an innovation exemption for tokenized securities and the rapid growthof tokenized real-world assets (RWAs), are creating an environment where TradFi institutions have less and less reason to ignore blockchain. Both the...
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