Bloomberg: How Wall Street Views the Mass Adoption of Crypto Assets?

Wall Street Blockchain pros share the conditions and methods for the popularization of Crypto Assets in the TradFi sector.

Written by: Anna Irrera, Emily Nicolle

Compiled by: Luffy, Foresight News

Crypto Assets and the Blockchain field are about to undergo significant changes: the new regulations implemented in Europe and the supportive stance of U.S. President Trump towards Crypto Assets have created conditions for large financial companies to boldly lay out their plans.

This means that executives in the TradFi sector are closely assessing the opportunities and challenges presented by this asset class. We posed a key question to top executives:

What is the most important single change driving the widespread adoption of Blockchain and Crypto Assets in the TradFi sector? What is the reason?

Global Co-Head of Kinexys Blockchain Platform at JPMorgan, Naveen Mallela

"Clearer regulatory guidelines, extensive industry collaboration, and solid public-private partnerships will be key elements for the scaling of digital assets in the TradFi sector. Our business is built on a foundation of innovation, just like the industry we serve, which is always evolving. By working closely with clients, regulators, traditional financial institutions, and emerging fintech companies, we can explore and build the future of finance and currency."

Mallela and Tyrone Lobban co-lead JPMorgan's Blockchain business unit Kinexys (formerly Onyx). The unit's Kinexys digital payment is a blockchain-based payment tool that processes over $2 billion in payment transactions for bank clients every day.

Caroline Butler, Global Head of Digital Assets at BNY Mellon

"Blockchain and digital assets are becoming increasingly important components of the global financial landscape, primarily due to the accelerating shift from proof of concept to actual commercial products. Looking ahead, the most significant single transformation to accelerate the adoption of these technologies will be the integration of an interoperable, institutional-grade infrastructure to connect the Blockchain ecosystem with the TradFi system. In the next 12 to 36 months, we anticipate an acceleration phase where digital assets will mature and become more deeply integrated into the financial ecosystem, providing opportunities for collaboration between banks, regulated market participants, global regulators, and legislators."

Butler leads all business and strategic plans at BNY Mellon in the areas of digital assets and tokenization, including its digital asset platform. BNY Mellon provides accounting, management, and other services for most U.S. digital asset exchange-traded products and their issuers. In 2024, the bank also participated as a custodian, payment agent, and investor in the European Investment Bank's digital bond issuance, and became the fund manager and custodian of BlackRock's tokenized money market fund BUIDL.

President of Fidelity Digital Assets Mike O’Reilly

"Education, or rather the lack of education, is one of the biggest driving forces or obstacles for encryption adoption. From the perspectives of investors, companies, or regulators, digital asset education is crucial for driving industry momentum and promoting industry consolidation."

Fidelity Digital Assets provides trade execution and custody services for institutional investors in Bitcoin, Ethereum, and Litecoin. As a subsidiary of Fidelity Investments, it also serves Fidelity's crypto retail and wealth management businesses, enabling investors to buy, sell, and custody Crypto Assets. Fidelity Digital Assets holds the tokens behind Fidelity's crypto ETFs, including the Bitcoin Fund (FBTC) and the Ethereum Fund (FETH).

Head of Digital Assets and Currency Group at HSBC John O’Neill

"HSBC believes that secure and reliable forms of digital currency, such as tokenized deposits, can accelerate the adoption of digital assets."

O’Neill is responsible for formulating strategies for HSBC Holdings plc in the areas of digital assets, central bank digital currencies, stablecoins, and Crypto Assets. He led the development of the digital asset platform HSBC Orion, which has been used to issue several native digital bonds, including the HKD 1 billion native digital bond issued by HSBC Hong Kong in 2024.

BlackRock Digital Assets Head Robert Mitchnick

"In terms of activity level and adoption, public Blockchains are clearly superior to private Blockchains. We believe that it is time for banks to shift their focus from private Blockchains to public Blockchains. We are confident that this will accelerate innovation, allowing more market participants to integrate into the digital asset ecosystem with the support of banks as key service providers."

Mitchnick is responsible for advancing BlackRock's digital asset strategy, which includes two ETFs focused on Crypto Assets. The iShares Bitcoin Trust is the fastest ETF in history to surpass $50 billion in assets under management. BlackRock also manages a tokenized money market fund on Ethereum, BUIDL, with assets of approximately $1 billion.

CEO of FORGE, a subsidiary of Société Générale, Jean-Marc Stenger

"The regulatory landscape in the U.S. may undergo a dramatic shift, favoring digital assets. Republican lawmakers view digital assets as key to America's future economic leadership. In Europe, the Markets in Crypto Assets Regulation (MiCA) will take effect on December 30, 2024, opening a window of opportunity for the creation of unified regulatory rules for the primary and secondary markets of Crypto Assets."

Stenger leads the crypto assets subsidiary FORGE of Société Générale, which focuses on providing services for the issuance and management of digital assets for clients. The subsidiary has been active in several digital bond issuances, including the 100 million euro bond issuance by the European Investment Bank in 2021. In 2023, FORGE issued EURCV, which is the first euro-denominated stablecoin ever issued by a tier-one bank subsidiary.

Managing Director of Digital Assets at Santander Bank Corporate and Investment Banking, John Whelan

"TradFi needs to seek clear regulatory approval to use public Blockchain, as true innovation comes from there. These Blockchains are the open-source, open-access operating systems for financial services, with operational costs borne by third parties known as validators. This is precisely the source of their disruptive potential."

Whelan joined Santander Bank in 2016, leading the bank's initiatives in encryption and digital assets. His work includes projects in areas such as digital securities, digital collateral liquidity, and digital cash. He also serves on the board of the Enterprise Ethereum Alliance and the blockchain company Fnality International Ltd.

Laurence Arnold, Global Head of Innovation, Client Operations, Performance and Reporting at AXA Investment Managers

"We believe that creating digital currencies with legal tender status is the most important change that can accelerate the process. These digital currencies can be private or public, but they need to have the same characteristics as legal tender to enable the settlement and reconciliation between the two parties in financial transactions (cash and digital assets). This means that a collaborative ecosystem is needed, where participants jointly seek solutions, and market participants clearly define their roles and responsibilities, especially to address the interoperability and liquidity issues of Blockchain technology. AXA Investment Managers is actively participating in the work being carried out by the European Central Bank regarding central bank digital currencies, which is a positive and important step in the right direction."

Arnold's innovative program leading this investment management company includes its Blockchain and digital asset projects, which involve participation in the European Central Bank's work on central bank currency settlements. This work includes representing French insurer AXA in investing 3 million euros in digital sovereign bonds issued to the Republic of Slovenia, as well as using Blockchain technology to allow Allianz Group to instantly subscribe to shares of AXA Court Terme's fund.

Citibank Digital Assets Head Artem Korenyuk

"The increasing emphasis by the United States on establishing clear regulatory guidelines for digital assets is very encouraging to us. Clear and consistent rules are essential for fostering innovation, protecting investors, and integrating digital assets securely into the broader financial ecosystem. We are optimistic that this clarity will be prioritized in the near future, paving the way for a more transparent and resilient digital asset market."

Korenyuk leads Citigroup's enterprise digital asset team, which works across all business lines within the company to develop new digital asset services and features. The team collaborates closely with the bank's service business to develop the Citi Token Services, a tokenized deposit application that allows some of the bank's corporate clients to make payments using Blockchain technology.

Laser Digital CEO Jez Mohideen

"The biggest obstacle for institutions adopting digital assets is the lack of industry expertise. Many people still confuse Crypto Assets, Web3, digital assets, and tokenization. Although they are interconnected within the same ecosystem, each has different market propositions and can bring unique benefits. By conducting targeted education to deepen the understanding of the opportunities and advantages brought by Blockchain-enabled products and services, institutions can participate more effectively, thereby driving faster and broader adoption."

Mohideen co-founded Laser Digital, a digital asset subsidiary of Nomura Holdings, with former colleague Steve Ashley in 2022. Laser Digital has 100 employees globally and offers a range of digital asset services, including trading, asset management, and fund management. It also makes equity investments, with portfolio companies including custodian Komainu and Crossover Markets.

Zodia Custody CEO Julian Sawyer

"The global integrated traditional financial system operates based on a cross-market governance framework, such as the 'Travel Rule.' However, the digital asset industry lacks such a framework and has long focused on regulatory frameworks for specific markets rather than global governance. Traditional financial institutions will not rashly enter the digital asset space until they can ensure compliance with the existing complex operational requirements. This means that global governance—a broader standard and structural system jointly agreed upon by stakeholders, including governments, industry trade groups, and industry working groups—will ultimately drive institutions' adoption of digital assets."

Sawyer is the head of Zodia Custody Ltd, a company owned by Standard Chartered Bank and supported by SBI Holdings, Emirates NBD, Northern Trust, and National Australia Bank. Its clients include Invesco and ETF issuers 21Shares and Bitwise.

Head of Innovation and Digital Assets Group at European Clearing Group Jorgen Ouaknine

"In a nutshell: standardization. Standardization is a key factor in the successful scaling of nearly every major technological and financial innovation throughout history. From the Industrial Revolution to the Digital Age, the establishment of universal standards has enabled interoperability, increased efficiency, and driven widespread adoption. This is equally true for the integration of digital assets and TradFi."

Ouaknine leads the group's innovation and digital assets work after trading, including its recent push to utilize distributed ledger technology to enhance market liquidity, such as bond issuance, and to make collateral more liquid, faster, and more efficient. The group has participated in various blockchain initiatives across industries, such as the "Guardian Program" of the Monetary Authority of Singapore, and operates a platform that uses blockchain to issue traditional securities.

Global Digital Asset Head at US Custody Trust and Clearing Company Nadine Chakar

"It's simple: we can no longer experiment independently; we should start collaborating across the entire industry to fully explore the potential of Blockchain in the financial services sector. While we have clearly demonstrated the advantages of this technology, it is now time to work together to deploy real applications onto the ledger using tokenization technology. In this process, we need to ensure that we are all moving towards a common goal: building efficient digital market infrastructure and standards. Collaboration is a key factor in helping us realize the potential of digital assets."

Chakar, due to the acquisition of the blockchain startup Securrency by the Depository Trust & Clearing Corporation (DTCC) in 2023, has been leading the push for the company to provide blockchain technology and services for post-trade processing of tokenized assets. In 2024, DTCC collaborated with WisdomTree to offer real-world assets in token form on a mobile application called WisdomTree Prime and launched a sandbox to facilitate greater industry collaboration in the development of blockchain market infrastructure.

Franklin Templeton FIRST and Digital Asset and Industry Consulting Services Head Sandy Kaul

"The most important single transformation has begun to emerge: U.S. regulators are changing direction, actively seeking to support the adoption of public Blockchains, and positioning our company at the forefront of new capital markets. This can eliminate the existing barriers that hinder the integration of the TradFi ecosystem with the Crypto Assets ecosystem, and create new solutions to old problems, including digital identity, new approaches to KYC/AML, and the liquidity of markets and collateral."

Kaul is responsible for overseeing Franklin Templeton's industry consulting services team, assessing the company's internal innovation development direction. This work involves collecting expertise on new technologies such as artificial intelligence and Blockchain, assisting in driving Franklin Templeton's strategic plans, such as digital asset infrastructure and the Benji coin product line.

UBS Group Chief Investment and Strategic Investment Officer Hyder Jaffrey

"Clarifying the handling methods and compliance standards for digital assets is key."

Since 2015, Jaffrey has been at the forefront of UBS Group's efforts to drive how digital assets and Blockchain technology can transform wholesale and institutional financial business models. He has represented UBS Group in various market initiatives, including digital bond issuance, the Fnality global payment system, digital repurchase agreements, and digital margin trading.