Wall Street Leads RWA Market, Treads Carefully in DeFi

IconCryptoNewsTerminal Staff26 Jul, 2024

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Wall Street Leads RWA Market, Treads Carefully in DeFi

Wall Street continues to dominate the real-world asset (RWA) tokenization market, outpacing native crypto players. However, these financial institutions are approaching the decentralized finance (DeFi) space with caution. DeFi, a sector operating in a regulatory gray area, utilizes automated software for various financial services. Despite its potential, banks remain hesitant due to the lack of clear regulatory frameworks and the need for centralized authority to ensure asset authenticity. Standard Chartered's Steven Hu believes complete decentralization is not feasible for banks. Centralization provides assurance of asset authenticity, uniqueness, and usability. The bank had previously projected the RWA market could reach $30.1 trillion by 2034. While Wall Street leads in RWA tokenization, its conservative approach to DeFi highlights the ongoing challenges facing the broader crypto industry as it navigates regulatory and legal uncertainties.

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