Wall Street companies may adopt blockchain technology, but not in its current form. The open, distributed ledger visible to all stakeholders goes against the way traditional finance works, said Don Wilson, founder and CEO of DRW, a TradFi trading company that has been active in crypto for over a decade.
“There’s no world where institutions are going to say, ‘Oh yeah, just post all my trades on-chain,'” Wilson said at the Digital Asset Summit in New York on Thursday. “Any money manager would consider it a breach of his fiduciary duty to publish every trade he makes to the world.”
Having every trade visible conflicts with how institutions manage risk and protect trading strategies, Wilson said. If an investor with a large stake in a company starts selling the shares, other market participants will be able to spot the pattern and the initial trades will have a “huge price impact” on the investor’s subsequent trades. In other words, transparency works against the trader.
“The problem is not the technology itself, but how it is implemented,” Wilson said. “I think it is a mistake to put things on these chains that have total transparency.”
DRW was founded in 1992 and introduced Cumberland in 2014, one of the first institutional cryptocurrency trading desks, just like bitcoin. The markets began to take shape. That early entry gave the company a front-row seat to see how digital assets evolved from niche markets to infrastructure that banks now study.
Wilson’s current approach reflects that change. He noted efforts to bring traditional assets onto the chain and warned against doing so on fully transparent networks.
Ethereum has long been held up as the blockchain most likely to connect to Wall Street, with developers highlighting its large decentralized finance (DeFi) ecosystem and its role in early tokenization efforts.
But, like Bitcoin, all transactions are visible and the big banks have taken a different path. Many have spent years building or supporting permissioned private networks, arguing that financial institutions need tighter control over data, access and compliance. Companies such as JPMorgan, the largest US bank by assets, have developed internal systems, while others have supported platforms designed to limit who can view and validate transactions.
Wilson advocated for systems that limit visibility. “Privacy is at the top of the list,” he said, describing the features necessary for institutional adoption. He also cited market structure issues such as anticipation. “That ability for people to reorder transactions… is simply not appropriate for financial markets.”
His comments come as tokenization gains traction across the industry. Banks and asset managers are testing ways to move stocks, bonds and other assets onto blockchain-based systems. Wilson agrees that the opportunity is large, especially for major asset classes. But he expects the design to be different from current public chains.
“I think it’s obvious that that’s not going to happen,” he said, referring to the idea that institutions will adopt fully transparent systems. “Everyone thinks I’m crazy… so I don’t know. Maybe I’m wrong. We’ll see.”
