Author:Guy Wuollet
Translation: Jia Huan, ChainCatcher
As someone who considers himself part of the "crypto world," I've always been puzzled: why do Wall Street and increasingly Washington politicians insist on using the term "digital assets"?
Nearly all the assets I deal with on a daily basis are digital.
I can't even remember the last time I carried cash. From bank accounts to brokerage accounts, all personal finances are online. I rarely even pull out a physical credit card anymore. Having spoken with peers, I'm not alone.
For most people in developed countries, the only truly non-digital assets left are physical things like houses and cars. These are called "real assets," a term that ironically adds more confusion, as it inherently suggests that stocks, bonds, network tokens, derivatives, and the like are somehow not "real."
But of course they are real.
However, after years of investing in and building systems in fintech, I've come to realize 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 completely rebuilt around software. Finance appears similar on the surface, but its foundation has largely remained untouched—the wave of digitization brought about by mobile internet and cloud computing, which reshaped the global economy, almost bypassed the financial industry.
This is finally starting to change.
The Coordination Problem in Finance
In many ways, financial institutions are still stuck in the past.
They run on fragmented systems, relying on documents and constant reconciliation to keep things running. Simply figuring out "who owns what," "when to settle," "how to order transactions," and "which rules apply" consumes an enormous amount of time.
In theory, a shared database could solve the problem. But in practice, more difficult questions immediately arise: Who controls this database? Who has permission to change it? What happens when the participating parties don't trust each other?
This is why blockchain is gaining traction in places that seem entirely different from the early crypto world.
Crypto culture initially revolved around concepts like "decentralization" and "financial sovereignty," which remain important today. However, what's driving large financial institutions towards this technology isn't ideology, but the more practical problem of coordination.
Wall Street's logic has always been more pragmatic than ideological.
Every trading firm's sensitivity to counterparty default risk is the same as every startup's sensitivity to platform risk (like a project built on Facebook that could be kicked off at any moment).
Counterparty risk needs managing, censorship resistance needs managing, fair ordering and best execution need managing. Wall Street won't call this "decentralization," but it's essentially tackling the same problem.
In my view, blockchain is the first real answer to these age-old problems.
It provides a neutral system that allows multiple parties to coordinate without handing 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 other external record to adjudicate who owns what.
The asset itself 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, allowing everyone to upgrade their own backend systems.
This is what the term "digital assets" really seeks to express—it represents the digital transformation of financial services, just as cloud services represented the digital transformation of large enterprises back in the day.
What Going 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 button-down shirts, compliance reviews, and various compromises.
But while Wall Street uses blockchain for its digital transformation, it is also, perhaps unknowingly, inheriting the strongest capability of the crypto space—an ability the software industry has enjoyed 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 each time.
Some benefits are obvious, such as 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 won't disappear as it enters financial institutions; it will simply be repackaged.
This movement is becoming infrastructure. And when Wall Street starts using this infrastructure, it may ultimately inherit more of the crypto ethos than it ever imagined.
