Joseph Chalom, head of strategic partnerships at BlackRock, spoke at the State of Crypto Summit in New York on Thursday, emphasizing the importance of developing digital identity infrastructure for large institutions to get involved in decentralized finance (DeFi). He noted that We go to jail, if we don’t know who we’re trading with, and that We need clear understanding of who is in a pool.
BlackRock, the world’s largest asset manager, has recently become a priority-setting player in the industry by applying to list a bitcoin exchange-traded fund (ETF). Chalom is not optimistic that the digital identity issue will be solved in the short term, and that issues such as automated market making in DeFi instead of central order limit books are just fig leaves.
The digital identity infrastructure is critical for large institutions to get involved in DeFi, as it is necessary to identify counterparties and ensure compliance with regulations. BlackRock’s size and influence may be able to set industry rules that the anonymous crypto natives may not be able to.