Author:Guy Wuollet
Compiler: Jiahuan, ChainCatcher
As someone who identifies as part of the 'crypto space,' I've always wondered: why do Wall Street and, increasingly, politicians in Washington insist on using the term 'digital assets'?
Almost all the assets I deal with daily are digital.
I can't even remember the last time I carried cash. From bank accounts to brokerage accounts, all my personal finances are online. I rarely even pull out a physical credit card. Talking to peers, I'm not an exception.
For most people in developed countries, the truly non-digital assets left are things like houses and cars. These are called 'real assets,' which ironically adds more confusion—it implies that stocks, bonds, network tokens, and derivatives are somehow not 'real.'
But of course they are real.
However, after years of investing and building systems in the fintech space, I've realized something: much of finance is not as digital as we think.
Most other sectors of the economy—from media and retail to logistics—have been fundamentally restructured around software. Finance looks similar on the surface, but its foundations have barely moved—the wave of digitization that the mobile internet and cloud computing brought to the global economy largely bypassed the financial industry.
And now, this is finally starting to change.
The Coordination Problem in Finance
Financial institutions are, in many ways, stuck in the past.
They operate on fragmented systems, relying on files and constant reconciliation to keep things running. Just figuring out 'who owns what,' 'when to settle,' 'how to sequence transactions,' and 'which rules apply' takes an immense amount of time.
In theory, a shared database could solve this. But in practice, harder questions immediately arise: who controls this database? Who has permission to change it? What happens when the participants don't trust each other?
This is why blockchain is gaining traction in places that look very different from the early crypto scene.
Crypto culture initially revolved around ideas like 'decentralization' and 'financial sovereignty,' which remain important today. But what is pushing large financial institutions toward this technology is not ideology, but the more pragmatic problem of coordination.
Wall Street's logic has always been more pragmatic than idealistic.
Every trading firm is as sensitive to counterparty default risk as every startup is to platform risk (like a project built on Facebook that could be kicked off at any moment).
Counterparty risk must be managed, censorship resistance must be managed, and fair sequencing and best execution must be managed. Wall Street might not call this 'decentralization,' but what it's solving for is essentially the same thing.
In my view, blockchain is the first time a decent answer has been provided for these old problems.
It provides a neutral system that allows multiple parties to coordinate without having to hand control to a single owner. Asset ownership is written directly into the software, eliminating the need for a separate ledger to reconcile against, and there is no external record to adjudicate who owns what.
The asset *is* the record.
This is the real reason Wall Street is starting to seriously embrace blockchain: not because they suddenly believe in decentralization, but because blockchain provides a common 'default option' among multiple counterparties, enabling them to upgrade their respective backend systems.
This is what the term 'digital asset' truly aims to convey—it represents the digital transformation of financial services, much like cloud services represented the digital transformation of large enterprises.
What Moving On-Chain Means
As the crypto industry moves towards Wall Street, it is also shedding some of its rebellious spirit, entering an adult world filled with dress shirts, compliance reviews, and various compromises.
But while Wall Street uses blockchain for digital transformation, it is also, perhaps unknowingly, inheriting the strongest capability of the crypto space—one that the software industry has possessed for decades: composability.
When financial assets run on shared, programmable infrastructure, they can be composed, extended, and integrated without having to be rebuilt from scratch every time.
Some of the benefits are obvious, like faster settlement and lower costs. But the deeper change is structural: building applications on top of this system will become much easier.
In other words, crypto technology will not disappear once it enters financial institutions; it will simply be repackaged.
This movement is becoming infrastructure. And when Wall Street starts using this infrastructure, the crypto spirit it ultimately inherits may be far greater than it originally anticipated.
