Public blockchains, with their open structure and unrestricted access, are poised to lead the next wave of financial innovation, similar to how the internet revolutionized communication and commerce. Markus Infanger elaborates on how these technologies enhance institutional participation in decentralized finance.

The tokenized asset market is projected to grow immensely, with a forecast of reaching up to $16 trillion by 2030 according to Boston Consulting Group. Utilizing public blockchains allows institutions to bring traditional financial assets on-chain, providing operational efficiency alongside added security, verifiable trust, and revenue generation opportunities.

Some blockchains operate fully open and permissionless, affording anyone the ability to view transactions and participate as validators, while others combine permissioned features to ensure compliance and controlled engagement within the broader open network.

While private blockchains have historically been preferred for their security and compliance capabilities, their restrictive nature limits participant engagement, resulting in lower liquidity and inefficient price discovery. With growing regulatory clarity, decentralized platforms like Ethereum or Solana are likely to become more appealing for institutional players.

Major entities such as BlackRock and Franklin Templeton are already leveraging public blockchains to tokenize regulated assets, creating significant movements into decentralized finance (DeFi). In the coming years, we anticipate shifts of financial products, including private equity, onto these platforms, hastening institutional adoption.

Emerging regulations like the EU’s Markets in Crypto-Assets (MiCA) are key in offering the necessary structures for this transition, confirming that institutional interest in DeFi will only accelerate from here. Public blockchains also promise new revenue avenues by enhancing global market access through asset fractionalization, broadening the investor base, and boosting trading volumes.

As public blockchain adoption progresses, the focus shifts from if institutions will adopt these technologies to how quickly this change will materialize. This transformation holds the potential not only to redefine finance but also to serve as a cornerstone for DeFi within global financial markets.