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As financial institutions deepen their involvement in digital assets, one question looms large: What role will traditional financial institutions (TradFi) play in a blockchain-powered economy?
- Trust reimagined: Institutions shaping the Web3 future
- TradFi meets DeFi
- Trust redefines security
- Fueling a new era of institutions
Much of Web3’s early narrative emphasized the possibility of reducing reliance on traditional intermediaries. Blockchain introduced a model where code, cryptographic verification, and peer-to-peer networks could shift some functions historically handled by banks, custodians, or payment networks.
Yet a recent webinar hosted by Fintech News Singapore on “Blueprint for Institutional Digital Asset Security at Scale” revealed a very different reality emerging as digital assets move into institutional finance.
The future of Web3 may not be trustless after all.
Instead, institutions are rebuilding trust through banks, custodians, payment networks, governance frameworks, and security infrastructure.
That may sound like a contradiction to blockchain purists. But it increasingly appears to be the model that global financial institutions are embracing as tokenized assets and stablecoins move from experimentation to production.
The panel brought together Sanchit Mall, Director of Digital Currencies, Asia Pacific at Visa (NASDAQ: V); Yip Kah Kit, Head of Blockchain and Digital Assets at UOB Group; Arthit Sriumporn, founder of digital asset custodian Rakkar Digital; and Ray Law, Senior Security Solution Architect at Thales.
Security may have been the focus of the webinar, but a bigger theme ran through the discussion: institutional adoption of blockchain is accelerating. So what is driving that shift?
One of the clearest signals came from Visa.
According to Mall, demand for stablecoin-powered payments is no longer theoretical. It is already creating measurable business value.
“We are seeing a tremendous growth in the demand for stablecoin-related payments,” Mall said.
The appeal is straightforward. Traditional financial systems operate on banking schedules; blockchain networks do not.
“We’re also seeing a strong demand on the money movement and the treasury side of stablecoin usage, where stablecoins can let you move money seven days a week instead of five days a week,” he explained.
Visa’s stablecoin settlement operations are already scaling rapidly.
“In fact, this year we had the run rate of hitting almost US$7 billion,” he added.
This is a significant shift for the digital asset industry. The conversation is no longer centered on speculative trading or token prices. Instead, institutions are focusing on practical utility, cross-border payments, treasury management, settlement efficiency, and liquidity optimization.
Yet even as institutions embrace blockchain infrastructure, they are not abandoning traditional safeguards.
They are importing them.
The return of the trusted middleman
Perhaps the most revealing comment of the discussion came from Kah Kit.
“The future is likely to see a coexistence of both traditional finance and also decentralized finance (DeFi),” he said.
That coexistence requires institutions capable of bridging both worlds.
Banks, custodians, payment processors, and compliance providers are increasingly positioning themselves as trusted intermediaries in a blockchain-powered economy.
This reality challenges one of Web3’s foundational assumptions.
The technology itself may be decentralized, but the services that institutions require, namely compliance, governance, custody, risk management, and security, still require organizations that can be trusted.
Kah Kit emphasized that UOB is building infrastructure designed for a “multi-asset, multi-network future,” one that can support tokenized money, stablecoins, central bank digital currencies (CBDCs), and tokenized real-world assets.
The goal is not to replace existing financial safeguards. It is to adapt them.
“We are taking a unified and holistic approach,” he explained, integrating tokenized assets into existing frameworks covering compliance, treasury, cybersecurity, settlement, and risk management.
In other words, institutions are not tearing down the financial system and rebuilding it from scratch. They are upgrading it.
Trust is becoming a competitive advantage
Another theme that repeatedly surfaced during the discussion is that security is no longer simply a technical issue.
It is becoming a trust issue.
Sriumporn, whose company Rakkar Digital once held approximately $700 million in digital assets under custody, argued that many security failures originate not from technology but from human behavior.
“Most of the time, technology is not compromised. People compromise,” he said.
That observation was echoed throughout the discussion.
The industry’s largest breaches often begin with social engineering attacks, compromised credentials, or operational failures rather than flaws in blockchain architecture itself.
As a result, institutions are focusing heavily on governance.
Rakkar implemented multi-layered approval structures, air-gapped key storage, biometric access controls, and employee security training.
Similarly, Thales’ Law argued that private-key protection remains the foundation of digital asset security.
“The number one factor isn’t the asset itself. It’s the key control,” Law said.
He added that many organizations still underestimate the risks associated with software-based key management.
“Software keys can be copied and stolen silently.”
The lesson is clear. Trust in digital assets increasingly depends not only on decentralization, but also on operational excellence.
The return of the trusted intermediary
One of the biggest misconceptions surrounding blockchain has been the belief that it would make institutions obsolete.
Instead, it appears to be creating a new generation of institutions.
Custodians manage digital assets.
Banks facilitate tokenized finance.
Payment networks connect blockchain systems to merchants and consumers.
Security providers safeguard critical infrastructure.
Compliance platforms help organizations meet regulatory requirements.
These entities may operate differently from their traditional predecessors, but they still perform a fundamentally important function: they create trust.
Kah Kit captured this reality in his closing remarks.
“There is a lot of room that can be played by trusted intermediaries.”
He added that these organizations provide “the compliance assurance, the risk management, as well as institutional security” needed for large-scale adoption.
That observation may ultimately define the next phase of Web3.
The industry’s early years were focused on proving that trustless systems could work.
The next phase may be about proving that trusted institutions can operate on blockchain rails.
If stablecoins, tokenized assets, and digital payments are to reach billions of users, trust will not disappear from the equation.
It will simply be rebuilt in new forms.
And that may be the most important lesson emerging from institutional blockchain adoption today.
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