- A BlackRock executive has said that institutional adoption of DeFi is far from certain
- Joseph Chalom told a crypto summit that such adoption is “many, many, many years away”
- Chalom said that regulatory issues are holding back the growth of the sector
Institutional adoption of DeFi is “many, many, many years away,” according to a BlackRock executive. Joseph Chalom, BlackRock’s head of strategic partnerships told a crypto summit yesterday that while the firm is engaging with clients over possibilities within the sector, regulations mean that large-scale adoption of DeFi remains a possibility rather than a probability. BlackRock of course filed for a Bitcoin ETF last week, which many have theorised will be approved in weeks rather than months.
Regulations Holding Back DeFi Adoption
Chalom was speaking during Coinbase’s State of Crypto Summit which was run in collaboration with the notably anti-crypto outlet the Financial Times. When the discussion of DeFi came up, Chalom revealed that BlackRock has been engaging in discussions with clients regarding the potential implications of DeFi once regulatory obstacles are resolved.
Chalom said that while he doesn’t see a dead end for institutional adoption of DeFi, he’s not confident it will come soon, saying, “Not that I’m pessimistic, I just live in a highly regulated space and so do our clients.” According to the BlackRock exec, companies like Coinbase, which offer institutional-grade wallets, could potentially serve as intermediaries connecting decentralized finance (DeFi) with traditional investors.
BlackRock Exploring More than a Bitcoin ETF
BlackRock filed for a surprise Bitcoin ETF last week, triggering a wave of similar applications from competing issuers, including those who have been previously denied, and leading to a surge in Bitcoin’s price. BlackRock has previously engaged in activities within the cryptocurrency space and has partnered with Coinbase to facilitate the management and trading of Bitcoin for institutional investors. Additionally, BlackRock serves as the manager of the cash reserves for Circle Internet Financial’s stablecoin, USD Coin.
Chalom emphasized that BlackRock is also focusing on tokenization and stablecoins, with the company has actively discussing with its clients the potential role of well-backed stablecoins in the movement of institutional funds.
