Jan said Binance had extended a system that already allowed customers to use crypto as collateral to include traditional assets.
“We have also copied what the U.S. market did in over 40 years in two weeks,” Jan said. “But now thats expanded to TradFi assets.”
Large funds are not yet placing much long-term risk on decentralized exchanges. Ilag said funds would need clear rules for custody and clearing, protections comparable to central clearing and custody services designed for institutional investors.
“That will take years,” Ilag said. “Near term, I'm skeptical of inflows to decentralized venues.”
He expects licensed centralized exchanges that settle through crypto systems to attract more institutional business in the near term. Hacks and concerns about smart-contract security remain barriers for decentralized platforms, he said.
“What most people want isn't the ideology of decentralization but a strong product, like a perp on a traditional index, with a license and guarantees behind it,” Ilag said.
Crypto exchanges still need benchmark data, licenses, banks, custodians and market makers to offer traditional products.
“The assets are why people show up, as everyone wants the exposure,” Ilag said. “The lasting advantage is what this does to market structure.”