<\/p>\n
The reality of financial blockchain adoption is turning out to be a very different story than the permissionless approach the digital asset space was built atop philosophically.<\/p>\n
Institutions including JPMorgan Chase<\/a>, Goldman Sachs<\/a>, Citi<\/a>, HSBC<\/a>\u00a0and BNY Mellon<\/a> have all launched blockchain-based platforms aimed at institutional finance, but these solutions rarely resemble the open, decentralized systems envisioned by early crypto advocates.<\/p>\n The most consistent pattern across bank blockchain products, in fact, has been that they\u00a0do not use open permissionless networks as their primary infrastructure at all.<\/p>\n At least, that was until\u00a0 last week<\/a>, when Kraken Financial<\/a>, the Wyoming-chartered bank of the\u00a0Kraken<\/a>\u00a0cryptocurrency exchange, was granted a Federal Reserve\u00a0master account<\/a>\u00a0by the\u00a0Federal Reserve Bank of Kansas City<\/a>.<\/p>\n \u201cWe\u2019re the bankers now,\u201d\u00a0Jesse Powell<\/a>, co-founder and chairman of Kraken,\u00a0posted<\/a>\u00a0on social platform X.<\/p>\n Days later, Kraken<\/a>\u00a0parent\u00a0Payward<\/a>\u00a0launched a tokenization-focused partnership<\/a> with\u00a0Nasdaq<\/a>\u00a0to allow\u00a0tokenized equities to\u00a0smoothly\u00a0flow between permissioned institutional markets and permissionless DeFi spaces.<\/p>\n Advertisement: Scroll to Continue<\/p>\n<\/div>\n As the blockchain sector\u00a0starts to institutionalize<\/a>, understanding the technical structure<\/a> of various offerings and products is becoming increasingly useful for teams across payments, finance and treasury.<\/p>\n See also: <\/strong>Why Banks Want to Issue Stablecoins<\/a>\u00a0<\/strong><\/p>\n In its earliest phase, cryptocurrency was often framed as an alternative to the traditional financial system. Advocates argued that blockchain networks could bypass banks, reduce reliance on government-issued currencies and create a decentralized monetary architecture.<\/p>\n Today, however, the trajectory of blockchain adoption looks markedly different. Banks see blockchain less as a new currency system and more as a new settlement layer for traditional assets. As a result, the systems gaining traction are often far more controlled than the open networks that originally defined the industry.<\/p>\n Many institutional launches today fall into three categories:<\/p>\n These systems typically run on\u00a0private distributed ledgers\u00a0or controlled networks.<\/p>\n We\u2019d love to be your preferred source for news<\/a>.<\/p>\n Please add us to your preferred sources list so our news, data and interviews show up in your feed. Thanks!<\/p>\n<\/p><\/div>\n<\/p><\/div>\n<\/div>\n In practice, critics allege they can resemble\u00a0distributed databases with blockchain branding, but even companies that once championed open blockchain networks are exploring more closed models.<\/p>\n Kraken\u2019s parent company, for example, will need to provide a tradfi layer on top of its new DeFi gateway. The pact with Nasdaq specifies that the company will serve<\/a> as the \u201cprimary settlement layer for these transactions in eligible jurisdictions \u2026 providing KYC and AML onboarding compliance.\u201d<\/p>\n Read more:<\/strong>\u00a0Stablecoins Face Tax-Time Reckoning as GENIUS Act Sets Compliance Bar<\/a><\/p>\n As the digital payments ecosystem evolves, stablecoins and other tokenized payment systems increasingly require compliance frameworks, identity verification and integration with existing financial networks. Many of these systems involve some degree of permissioning, whether through issuer controls, compliance layers or restricted participation.<\/p>\n Public blockchains, with their anonymous wallets and global accessibility, can create challenges for institutions operating within strict compliance frameworks.<\/p>\n Most tokenization experiments, for example, still rely on\u00a0traditional legal infrastructure<\/a> where custodians hold the real asset, tokens represent a claim, and regulators control distribution. This means that the token is often\u00a0a digital wrapper around an existing financial instrument, not a fundamentally new asset class.<\/p>\n \u201cThe real opportunity isn\u2019t about chasing the buzzwords, but it\u2019s more about being disciplined, identifying where\u00a0stablecoins<\/a>\u00a0truly outperform a so-called legacy payment system,\u201d\u00a0Bryce Jurss<\/a>, vice president, head of Americas, digital assets at\u00a0Nuvei<\/a>, told PYMNTS in an earlier discussion.<\/p>\n At the same time, if the structure of the emerging blockchain financial system appears to be one that is increasingly influenced by the traditional financial sector, the same can be said of the digital asset space\u2019s influence on the traditional financial system.<\/p>\n The U.S. Office of the Comptroller of the Currency<\/a>\u00a0(OCC) has received upwards of a dozen new\u00a0digital asset<\/a>\u00a0licensing applications from entities planning to offer<\/a> digital asset products or services.<\/p>\n Even Morgan Stanley<\/a> has applied<\/a> for one.<\/p>\n<\/div>\n","protected":false},"excerpt":{"rendered":" The reality of financial blockchain adoption is turning out to be a very different story than the permissionless approach the digital asset space was built atop philosophically. Institutions including JPMorgan Chase, Goldman Sachs, Citi, HSBC\u00a0and BNY Mellon have all launched blockchain-based platforms aimed at institutional finance, but these solutions rarely resemble the open, decentralized systems […]<\/p>\n","protected":false},"author":2,"featured_media":421823,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[4],"tags":[235,203,210,234,231,232,237,238,236,233],"class_list":["post-421822","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-blockchain","tag-bitcoin","tag-crypto-currency","tag-elon-musk","tag-ethereum","tag-hyperledger","tag-ibm","tag-mining","tag-nodes","tag-spacex","tag-tesla"],"_links":{"self":[{"href":"https:\/\/dripp.zone\/news\/wp-json\/wp\/v2\/posts\/421822","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/dripp.zone\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/dripp.zone\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/dripp.zone\/news\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/dripp.zone\/news\/wp-json\/wp\/v2\/comments?post=421822"}],"version-history":[{"count":1,"href":"https:\/\/dripp.zone\/news\/wp-json\/wp\/v2\/posts\/421822\/revisions"}],"predecessor-version":[{"id":421825,"href":"https:\/\/dripp.zone\/news\/wp-json\/wp\/v2\/posts\/421822\/revisions\/421825"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/dripp.zone\/news\/wp-json\/wp\/v2\/media\/421823"}],"wp:attachment":[{"href":"https:\/\/dripp.zone\/news\/wp-json\/wp\/v2\/media?parent=421822"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/dripp.zone\/news\/wp-json\/wp\/v2\/categories?post=421822"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/dripp.zone\/news\/wp-json\/wp\/v2\/tags?post=421822"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}The Permissionless Ideals of Web3 Meet Wall Street\u2019s Economic Reality<\/strong>\u00a0<\/strong><\/h2>\n
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Where Real Transformation is Happening Above the Surface<\/strong><\/h2>\n