BlackRock, the biggest asset manager in the globe, appears to be bullish about institutional crypto adoption but BlackRock thinks that equivalent institutional player involvement in decentralised finance (DeFi) won’t happen for several years.
Although BlackRock stunned the cryptocurrency market last week when it filed for spot Bitcoin ETF. Due to the recent rush of Bitcoin ETF registrations, both the price of Bitcoin and the overall digital currency market have seen significant gains.
BlackRock’s chief of strategic alliances, Joseph Chalom, said that the company has been talking with its clients about the consequences of DeFi and the regulatory challenges they must face at the State of Crypto Summit hosted by Coinbase Global Inc.
Chalom stated that it will still be “many years away” before DeFi is adopted by institutions. I simply live in a very regulated environment, as do our customers, he said, adding that he wasn’t being negative.
In a recent speech, Chalom stated that since Coinbase provides institutional-grade wallets, it may play a crucial role in bridging the gap between mainstream investors and DeFi.
It’s interesting to note that despite the SEC filing a complaint against the exchange earlier this year, BlackRock chose Coinbase to offer the custodial service. Many in the cryptocurrency community think that this would speed up the SEC’s resolution with Coinbase.
Interestingly, despite the SEC filing a lawsuit against the exchange earlier this year, BlackRock has picked Coinbase as the custodial service provider. Many in the cryptocurrency community think that this would speed up the SEC’s settlement with Coinbase.
Coinbase has long been a provider of capital to institutional investors, providing authorised custodial services. Additionally, it handles the USDC stablecoin issuer Circle’s cash reserves.
Chalom added that BlackRock is currently investigating stablecoins and tokenization as significant areas of interest. The business has been having conversations with customers about the possible application of solid stablecoins to ease the transfer of institutional assets.
Recently, Fed Chair Jerome Powell discussed the need for a legal structure for stablecoins while noting that digital currencies like Bitcoin have “staying power” as a financial instrument and that stablecoins are a kind of money.
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