Wall Street companies may adopt blockchain technology, albeit not in its current form. Don Wilson, founder and CEO of TradFi trading firm DRW, which has been active in the crypto space for more than a decade, said that an open distributed ledger that anyone can view goes against the grain of traditional finance.
“There’s no world where financial institutions say, ‘Yes, I can publish all my transactions on-chain,'” Wilson said Thursday at the Digital Asset Summit in New York. “Any asset manager would consider it a dereliction of their fiduciary duty to reveal every transaction they make to the world.”
Wilson said having visibility into every trade is inconsistent with how financial institutions manage risk and protect trading strategies. When an investor with a large stake in a company starts selling shares, other market participants can pick up on the pattern, and the initial trade can have a “significant price impact” on the investor’s subsequent trades. In other words, transparency works against traders.
“The problem is not the technology itself, but how it is implemented,” Wilson said. “I think it’s a mistake to put things on a completely transparent chain.”
DRW was founded in 1992 and introduced Cumberland in 2014. This is one of the first institutional crypto trading desks as well as Bitcoin. BTC$68,988.27 A market began to form. This early entry gave the company a front-row seat to see how digital assets evolved from a niche market to the infrastructure that banks are currently exploring.
Wilson’s current focus reflects that shift. He pointed to efforts to bring traditional assets on-chain and cautioned against doing so on a fully transparent network.
Ethereum has long been touted as the blockchain most likely to be adopted by Wall Street, with developers touting its large decentralized finance (DeFi) ecosystem and role in early tokenization efforts.
But like Bitcoin, where every transaction is visible, big banks are taking a different path. Many have spent years building or supporting private permissioned networks, arguing that financial institutions need tighter controls over data, access, and compliance. Companies like JPMorgan, the largest U.S. bank by assets, have developed internal systems, while others support platforms designed to limit who can see and verify transactions.
Wilson argued for a system that limits visibility. “Privacy is at the top of the list,” he said, explaining the capabilities needed for institutional implementation. He also addressed market structure issues such as front-running. “The ability for people to reorder trades is simply not appropriate for financial markets.”
His comments come as tokenization gains momentum 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 its design to be different from today’s public chains.
“I think it’s clear that that’s not going to happen,” he said, referring to the idea that agencies would have a fully transparent system in place. “Everyone thinks I’m crazy…so I don’t know. Maybe I’m wrong. We’ll see.”
