Same, Same, But Different: Some Thoughts on the Current Crypto Moment
In crypto, it can be hard to distinguish between hype and real progress. Mark Arasaratnam's Three C's framework provides a way to assess where we really are in the institutional adoption story.
In a recent podcast I sat down with Mark Arasaratnam, who heads GenTwo Digital, our business focused on digital assets. Mark had a lot of interesting things to say on crypto and blockchain-related subjects, from tokenization and infrastructure through to the increasing sophistication of crypto structured products—many of which I'd like to unpack here on The Assetizer. (In fact, I’ve already started.)
For this post I'd like to focus on Mark's Three C's framework, which speaks to the big-picture issue of adoption.
Mark explained that there are basically three main hurdles that institutions still have to face: compliance, complexity, and custody.
These aren't just operational challenges—they're the fundamental barriers that have kept institutional money on the sidelines despite years of crypto's promise. I like them because they provide a very useful lens through which to assess where we really are in terms of institutional mainstreaming.
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Just 'Round the Corner
Adoption is a subject near and dear to my heart. I got into crypto in 2016 and was deep in the space until I moved to GenTwo in 2023 and returned to my banking and fintech roots. My journey took me through helping to found the Crypto Valley Association here in Switzerland, working three years at ConsenSys, running thought leadership at the EU Blockchain Observatory & Forum and working closely with the EU’s blockchain team, running comms and content for the Enterprise Ethereum Alliance, and even doing some blockchain-related editorial work for the Bank of International Settlements.
For an old-fashioned literature major, I’ve been very fortunate to meet and work with these people and many others like them, and get an insider look at a very interesting technological development. I’ve also seen a lot of inflection and mainstreaming moments, and heard a lot of "this time it's different" proclamations.
My experience has mostly been that breakthrough moments are oversold. The blockchain story so far has been one of hype cycles on the surface, and underneath that, constant slow iteration and progress. As Roy Amara knew, those who just watch the surface, and wonder why it’s taking so long, tend to miss the story.
Where We Are Now
There's a lot of talk about crypto right now. This is driven by the huge about-face in the United States under the Trump administration (although things were also moving, if slowly, before Trump II with the Bitcoin ETFs and all). For a lot of people this is the great mainstreaming moment we have all been waiting for. But is it really, or is it more iterative progress?
To figure that out, I thought it might be interesting to play a same/same/different game with Mark's C's.
In this game, “same” means were are just seeing another iteration, while “different” means something more like a breakthrough.
Compliance: Different (Slowly But Surely)
Mark said that "compliance is a bit nebulous because right now the world is still trying to figure out where it fits into the digital asset space. And governments are trying to figure out how to navigate that. People are hiring whole teams of lawyers to figure this out."
It's certainly true that the history of crypto regulatory evolution has been slapdash and highly inconsistent around the world. We've seen relatively comprehensive approaches like those in Switzerland where I live, and more recently in Europe with MiCA. We've seen chaos in the US, bans in China, dithering in the UK, and full-on embrace in places like El Salvador.
My take is that this time is different. I'm going to go for breakthrough, but one based on many years of slow but steady progress. For many years it was always the US that was the compliance barrier. With the strong about-face from the Trump administration, and with MiCA already in effect in Europe, you have two of the most important jurisdictions supporting crypto now. That will set the tone for the rest of the world. This legitimizes it.
Contrary sometimes to common belief, my experience is that regulators tend to be quite savvy about crypto and blockchain (even if they don't always do what the industry wants). Just don't expect anything close to a level playing field or regulatory alignment for the foreseeable future. After all, we still don't have that in traditional finance.
Complexity: Same (The Hard Reality)
Mark's point was that blockchain is still very complex as a financial rail for many institutions: "We're not used to settling those kinds of securities previously, because we spent the last hundred years working on regular asset classes."
My experience is that the technological sophistication in large institutions is very mixed. There are pockets of great sophistication. I "learned" blockchain from people at the UBS’s Level39 blockchain lab in London — a project they started all the way back in 2015. At the EEA I worked with blockchain teams at JP Morgan, Santander, EY, Microsoft. These people know their stuff.
Yet more often than not these institutional blockchain teams are pockets, islands in vast corporate oceans. Our struggle at the EEA was to bring the message outside of the blockchain bubble. Trust me: Pushing this technological adoption at this scale is hard. I think it will remain so.
So while blockchain remains an interesting choice for financial rails, I expect adoption to continue to be iterative. I'll come down on the side of Same.
Custody: Different (The Inflection Point)
Mark's last point was custody: "Custody has been difficult in the early years of crypto and now institutions are becoming a lot more savvy."
Custody is always at the heart of this discussion. Without it, you have nothing. Custody in the real world is built on trust and law. In blockchain it was supposed to be built on code. Alex Batlin, my UBS blockchain “mentor” at the beginning, went on to found the crypto custody company Trustology (later bought by Bitpanda). It was in talks with him and others that I learned just how central this part of the puzzle is.
Here I have to go the different route. As Mark points out, there seems to be an inflection point in terms of big institutions—who, as I mentioned, know their stuff—getting into the space. It's a solvable problem. Margins will come down, it will become a commodity, and it will be cheaper for people to use. This may not be exciting, but it's the kind of plumbing fix that can greatly facilitate adoption.
The Verdict: Two Out of Three Ain’t Bad
So there you have it: compliance (different), complexity (same), custody (different). Two out of three showing breakthrough rather than iteration.
That's not a perfect score, but it might be enough.
The question now is whether these improvements will finally translate into the mainstream adoption we've been waiting for, or whether we'll discover there's another C we haven't thought of yet. (Convergence, maybe?)
To conclude: We're closer than we've ever been. But then, with all the steady work that’s been going on behind the scenes, why shouldn’t we be?
All the best,
Tom