Private Or Public? Financial Institutions Debate Control In The Blockchain Era

As blockchain technology gains ground in finance, many traditional institutions use it to streamline transactions and automate back-office processes.

Robert Leshner, CEO and co-founder of Superstate, recently shared his perspective on how this trend unfolds, speaking ahead of his appearance at the Benzinga Future of Digital Assets event.

Private Blockchains as a Preferred Choice

Leshner explained that most financial institutions focus their blockchain activities on private networks, where they can work "out-of-sight of their competitors" and maintain control over the environment.

This setup allows them to test blockchain's potential benefits without the competitive visibility of public networks. For these institutions, private blockchains provide a means to enhance transaction speed and efficiency while keeping operations within a controlled framework.

Public Blockchain Use on the Horizon

While private blockchains are the current focus, Leshner anticipates that some of this activity will eventually transition to public blockchains. "Eventually, this activity will find its way onto public blockchains, where transactions are tamper-proof and secured by the economics of multi-hundred-billion-dollar platforms," he saod.

However, he also pointed out that traditional financial institutions may find it challenging to give up their control over private networks. Operating on public blockchains requires a shift toward a more open framework, which runs counter to the typical structure of centralized financial organizations.

Long-Term Expectations for Blockchain in Finance

Leshner suggests that the finance industry may move toward a model that blends private and public blockchain use, balancing efficiency with transparency as blockchain develops. As these institutions weigh the benefits of public networks against the controlled environments of private ones, blockchain's role in finance is expected to expand.

At the upcoming Benzinga Future of Digital Assets event, Leshner and other leaders will explore how blockchain's integration into finance could reshape the industry, discussing both the benefits and the challenges of broader adoption.

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As the digital asset market continues to mature, the convergence of regulatory shifts, M&A activities, and adoption trends will define the future of this dynamic field. Benzinga's Future of Digital Assets event in New York City this November will provide industry leaders and investors with a platform to explore these developments further, offering insights into the evolving regulatory environment and the latest market dynamics.

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