Public Blockchains in Financial Markets - Reflections from the SRI's Inaugural Session

The Solana Research Institute held its inaugural closed-door discussion at the House of Sol in London. Participants from traditional finance and the digital asset ecosystem gathered to examine one question: what role should public blockchain infrastructure play in financial markets? This report summarises the principal themes that emerged.

Participants included senior representatives from State Street, the DTCC, R3, Cahill Gordon & Reindel LLP, and an independent advisor with senior experience at Fidelity International and BlackRock. The discussion was chaired by the SRI's founder.

The session was held under Chatham House Rules.

I.  The Tokenisation Thesis Needs a Better Story

The first half of the session covered tokenisation of real-world assets, and the discussion moved quickly past the industry's standard framing on cost and efficiency.

Cost savings are real in specific contexts — intraday repo, collateral management, compression of settlement timelines. But participants broadly felt this had become the default argument for tokenisation, partly out of habit, and that it undersells the more compelling case. That case is about demand. There is a growing pool of on-chain capital — institutional allocators, stablecoin treasuries, a range of individual holders — that wants access to high-quality traditional assets and currently can't get it. Bringing those assets on-chain serves a genuinely new constituency rather than just repackaging things for existing investors.

"The tokenised market, including stablecoins, is less than 0.1% of the total market value of global capital markets. Getting to 1% would be a tenfold increase."

The parallel drawn to ETFs was instructive. The first ETF took years to reach a billion dollars in assets and was expensive to operate. Nobody predicted it would become the dominant global fund wrapper. The argument is that tokenisation follows a similar curve — slow, costly, widely sceptical in its early stages, and then significant.

One participant took a longer view still, arguing that the real opportunity in tokenisation is composability: the ability to decompose instruments — separating principal, coupon, credit risk — and reconstruct them as bespoke, liability-matched structures. Things that don't yet exist, essentially. This is a more speculative horizon than collateral efficiency, but it's where several participants felt the genuinely transformative potential sits.

There was also an honest note of caution. The infrastructure costs of issuing tokenised funds today are substantial, and the industry doesn't always acknowledge this clearly. Several participants felt that overstating the near-term efficiency case was counterproductive — it raises expectations that the current state of the market can't meet, undermining credibility when the harder questions arise.

II.  The Blockers Are Legal, Not Technical

If there was a single point of strong agreement across the session, it was that the primary obstacles to institutional adoption are legal and regulatory. This came up repeatedly and from multiple angles.

The structural tension is real and not easy to resolve. Blockchain assets are designed to move globally, instantly, and without permission. Financial instruments carry decades of jurisdictional law — securities regulation, AML requirements, custody obligations — that were never designed with this kind of asset in mind. A token that is perfectly lawful under one regulatory regime may run into serious problems the moment it reaches a holder in a different jurisdiction. That fragmentation constrains liquidity, which is what holds these markets back more than anything.

"Tokens are inherently made to be traded globally and instantly. The legal frameworks haven't caught up yet — and that leads to fragmentation, not just legally, but in terms of liquidity."

Settlement finality came up as a specific and underappreciated dimension of this. Legal finality — the protection that prevents courts from unwinding completed transactions — doesn't automatically extend to tokenised instruments, particularly those issued outside a central securities depository. Settling quickly on a blockchain and having legally robust settlement are different things. This distinction, participants felt, is not widely understood in the industry, and it matters enormously for collateral.

There are also constraints at the custodial layer. Custodians operate under regulatory obligations to maintain final books and records. Having those records sit on a decentralised network raises questions that current legal frameworks haven't resolved. For most regulated institutions, permissioned implementations remain the path of least resistance — partly from preference, partly from obligation.

On the broader regulatory picture, there was some optimism about the direction of travel in the US, and a clear view that stable, durable legislative frameworks are a prerequisite for institutional confidence. Regulation that shifts with changes in administration create a risk environment that institutions struggle to price, and which makes long-term infrastructure investment hard to justify.

III.  Accountability Is the Unsolved Problem

The second part of the session turned to what institutional adoption of public infrastructure would actually require in practice. Accountability kept surfacing as the central difficulty.

For institutions operating with fiduciary responsibilities — particularly custodians — the ability to identify who is responsible when something goes wrong is foundational to how they operate. Public, permissionless networks don't offer that counterparty by design. That gap was a significant driver for institutions having focused on private and permissioned environments until now..

"Accountability — who do I go to when things go wrong, who can I assign liability to — is not currently compatible with how public blockchains work."

One participant remarked that, whatever they say in public, institutions are ultimately pragmatic and follow their clients- if that is onto public chains, the institutions will find a way to make it work.  Another offered a historical reference as context for the debate about accountability: the nine-hour outage of the Bank of England's RTGS system in 2014. Even though there was clearly an accountable party, in practice, there was nothing any participant could do except wait, and no effective legal recourse against the operator. 

The notion that having an operator you can sue after the event reduces risk in critical infrastructure may be more of a comfort blanket than a real-world risk mitigation. The question for public chains is whether they can demonstrate lines of responsibility and structures of intervention that can fix issues within acceptable timeframes for the specific use cases being considered — and that's a more granular question than a blanket assessment of the technology.

Participants also discussed what a path towards greater institutional confidence might look like. On-chain participation by institutions as validators or node operators was identified as meaningful — skin in the game changes the governance dynamic. It also changes the conversation internally at those institutions, moving it from the innovation centre into the business lines where capital decisions are actually made. This is early days, but several participants saw it as part of how trust gets built over time.

IV.  The Longer View

The session closed with a round of views on where public chains ultimately fit in the financial system. Nobody wanted to give a timeline, and the honest answer from participants was that the range of uncertainty is too wide to be useful. But on direction, there was more alignment.

The dominant view was that the public/private distinction will gradually matter less than the business case. As the infrastructure matures, the question shifts from which kind of chain to who are my counterparties, what can I access, what yield can I generate. The architecture that answers those questions best will attract the capital.

There was also a thread around where adoption is most likely to come from first. The major systemically critical institutions — the ones whose failure would be catastrophic for global markets — are not going to rebuild their core infrastructure on public chains. The more interesting near-term opportunity is at the edges: lower-stakes use cases, more innovative participants, markets where the barriers to entry in the existing system are high enough that a better alternative becomes genuinely attractive.

On that last point, participants flagged emerging markets — India and Latin America specifically — as potentially significant adoption vectors. There is a large population in those regions that wants access to financial products the current infrastructure can't cost-effectively deliver. That demand may prove to be a more powerful driver of adoption than the institutional conversation happening in developed markets.

"If we are going to reintroduce intermediaries out of regulatory necessity, at the very least the base layer needs to be trustless, public, and permissionless."

The sharpest observation in the closing exchange was about the legal frameworks themselves. The difficulty of reconciling public blockchain technology with existing regulation may say as much about the regulation as about the technology. Trustless, permissionless infrastructure is not a bug. The compliance layers, governance structures, and permissions that institutions require can be built on top of it. That distinction between the base layer and what gets built on top of it will matter more and more as the conversation matures.

This session was the first in an ongoing SRI programme of research discussions, briefings, and working groups. Future sessions will examine specific aspects of institutional participation in open financial systems — across technology, market structure, governance, risk, and beyond.

Follow the Solana Research Institute on X and Linkedin, and subscribe to our event calendar to stay up to date with upcoming sessions around the world.

The Solana Research Institute (SRI) is an applied research forum dedicated to engaging financial institutions in open financial systems. We provide systematic analysis of onchain infrastructure, evaluating the transition from legacy frameworks to high-performance capital markets.

Our work establishes technical and strategic frameworks across the full lifecycle of financial activity—from origination and execution to governance and risk management—to identify the trends, opportunities, and constraints defining the next generation of market infrastructure.

This report summarises the themes and arguments from the discussion. Produced under Chatham House Rules: participants are listed by organisation but remarks are not individually attributed. Quotations have been lightly edited for clarity and do not represent the official positions of any organisation.