Wall Street firms could adopt blockchain technology, but not in its current form. The open, distributed ledger for anyone to see goes against the way traditional finance works, said Don Wilson, founder and CEO of DRW, a TradFi trading firm that has been in the crypto space for more than a decade.
“There’s no world where institutions will say, ‘Oh yeah, just publish all my transactions on-chain,’” Wilson said at the Digital Asset Summit in New York on Thursday. “Any fund manager would consider publishing to the world every trade they make a breach of fiduciary duty.”
Having every transaction 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 detect the trend and the initial trades will have a “huge price impact” on the investor’s subsequent trades. In other words, transparency works against the merchant.
“The problem is not the technology itself, but how it is implemented,” Wilson said. “I think it’s a mistake to put products on these channels that are completely transparent.”
DRW was founded in 1992 and introduced Cumberland in 2014, one of the first institutional crypto trading desks, just like Bitcoin. the markets began to take shape. This early entry gave the company a front-row seat to understanding how digital assets evolved from niche markets to infrastructures that banks are now studying.
Wilson’s current direction reflects this change. He highlighted efforts to integrate traditional assets on-chain and cautioned against doing so on completely transparent networks.
Ethereum has long been touted as the blockchain most likely to connect to Wall Street, with developers pointing to its vast 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 route. Many have spent years building or supporting private permissioned networks, arguing that financial institutions need tighter control over data, access and compliance. Companies like JPMorgan, the largest U.S. bank by assets, have developed internal systems, while others have supported platforms designed to limit who can see and validate transactions.
Wilson advocated for systems limiting visibility. “Privacy is kind of at the top of the list,” he said, describing the features needed for institutional adoption. He also cited market structure issues like front-running. “This ability for people to rearrange transactions…is just not suited to financial markets.”
His comments come as tokenization gains traction in the industry. Banks and asset managers are testing ways to move stocks, bonds and other assets to blockchain-based systems. Wilson agrees that the opportunity is significant, particularly for major asset classes. But he expects the design to be different from today’s public channels.
“I think it’s obvious that’s not going to happen,” he said, referring to the idea that institutions would adopt fully transparent systems. “Everyone thinks I’m crazy…so I don’t know. Maybe I’m wrong. We’ll see.”
