In a recent report, JPMorgan analysts noted that despite infrastructure development, DeFi and asset tokenization continue to underperform.
Institutional Participation Challenges in DeFi
According to the bank's research, institutional participation in cryptocurrency has not increased, despite the creation of compliance-focused tools. Developed permissioned lending pools and know-your-customer vaults have not led to broader institutional engagement with DeFi protocols.
Tokenization Prospects
Asset tokenization has generated interest across traditional finance sectors but has not achieved meaningful scale. The $25 billion in total tokenized assets represents growth, but most initiatives remain experimental or serve niche markets with limited liquidity.
Traditional Finance Skepticism Towards Blockchain
Many traditional investors express skepticism about the core features of blockchain technology. Existing financial technologies show rapid improvements, reducing the need for blockchain adoption.
JPMorgan's analysis highlights that DeFi and tokenization face structural challenges beyond regulatory clarity. The preference for established financial infrastructure is likely to persist.
