Digital Assets: What TradFi Institutions Need to Know

Digital assets are moving closer to the mainstream financial system, creating new opportunities for traditional financial institutions while introducing unfamiliar operational, regulatory and customer risks.

For leaders considering whether and how to add digital assets to their offerings or portfolios, the question is not simply whether customers want exposure. It is whether the institution can support that exposure with the same standards of accountability, security and transparency expected across the rest of its financial operations.

Members of the Senior Executive FinTech Think Tank point to three priorities: understanding where governance gaps remain, adapting the infrastructure behind custody and settlement and educating customers about what they are actually buying and how their assets are protected.

“Similar to how tech companies should have led a better understanding of AI, TradFi also has an opportunity to lead and enhance the understanding of this space. ”

– Banu Raghuraman, AI Lead Product Manager at Perficient

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Treat Governance As Part of the Product

Banu Raghuraman, AI Lead Product Manager at Perficient, brings more than 15 years of experience building customer experiences and software solutions, primarily across fintech, payments and healthcare. Her work includes mobile banking, real-time payments and conversational intelligence, giving her a product-focused perspective on how emerging technologies become part of financial services.

Her advice to TradFi institutions begins with recognizing that digital assets are developing as the governance environment evolves.

“TradFi needs to acknowledge the lack of a governance ecosystem around digital assets,” Raghuraman says. “While this is a great venture to keep track of as an innovative venture, TradFi needs to be very careful about how much risk they can introduce to customers’ wallets.”

That uncertainty creates both a risk and an opportunity for established financial institutions. As banks enter a market where customers may not understand the differences among direct ownership, third-party custody and other forms of digital-asset exposure, they can play a role in improving that understanding.

“In the absence of an established institution, TradFi also has an opportunity to lead and enhance the understanding of this space,” she says.

The regulatory environment underscores the need for that flexibility. In July 2025, the Office of the Comptroller of the Currency, Federal Reserve and Federal Deposit Insurance Corp. said banks providing crypto-asset safekeeping services should consider the benefits and risks of the activity, including risks involving third-party service providers, and operate safely and soundly in accordance with applicable laws and regulations.

“Similar to how tech companies should have led a better understanding of AI,” Raghuraman says, “TradFi also has an opportunity to lead and enhance the understanding of this space.”

For financial institutions, that means governance should not be treated as a final approval step after a product has already been designed. It should help determine which digital-asset products are appropriate, what controls they require and how much risk customers and the institution can reasonably absorb.

“Digital assets aren’t just a new product wrapper; they require rethinking core operational plumbing. ”

– Gaurav Vashisht, Head of Finance, Legal and HR Systems at Kraken

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Rethink the Infrastructure Behind the Asset

Gaurav Vashisht, Head of Finance, Legal and HR Systems at Kraken, approaches the question from the intersection of digital assets, enterprise finance and operational systems. He is also an independent AI expert and author whose work focuses on AI, digital assets and enterprise finance.

His central point is that digital assets cannot simply be placed inside existing financial products without examining the infrastructure underneath them.

“One thing TradFi institutions should keep in mind is that digital assets aren’t just a new product wrapper,” Vashisht says. “They require rethinking core operational plumbing like custody, settlement finality and reconciliation.”

That distinction matters because blockchain-based systems can introduce different models of settlement and transaction recording than traditional financial systems.

“Blockchain rails don’t map cleanly onto back-office systems built for T+1 or T+2 workflows,” he says. “Most back-office systems record transactions after the fact, whereas TradFi has a daily obligation to show corporate action and cash settlement.”

The objective is not to discard established disciplines in favor of newer technology. Digital assets need to fit into the same expectations around auditability, reconciliation and financial control.

“Auditability depends on that discipline,” Vashisht says. “Digital assets must fit that same standard, not sidestep it.”

Regulatory requirements also continue to develop across jurisdictions, making flexibility important when designing compliance and risk frameworks.

“Regulatory clarity is also still evolving jurisdiction by jurisdiction,” Vashisht says, “so compliance and risk frameworks need to be flexible enough to adapt rather than hard-coded to today’s rules.”

The custody question is particularly important. A December 2025 SEC investor bulletin explains that crypto-asset custody involves decisions about how and where assets are held and accessed, with different risks associated with self-custody and third-party custody. The bulletin also advises investors to examine a custodian’s regulatory status, security practices, potential use of customer assets and what could happen if the custodian fails.

“Equally important is client education,” Vashisht says. “Many customers want exposure without understanding custody models, volatility or the difference between holding an asset directly versus through a derivative wrapper.”

If an institution distributes a product without pairing it with genuine advisory guidance, it can also face reputational consequences when customers discover a product operates differently from what they expected.

“Ultimately, the winners here will be the institutions that treat digital assets as long-term infrastructure, not a bolt-on feature chasing short-term demand,” he says.

“The goal should be to innovate without sacrificing the trust that makes traditional financial institutions valuable.”

– Allen Kopelman, Founder and CEO of Nationwide Payment Systems Inc.

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Protect Trust While Expanding Access

Allen Kopelman, Founder and CEO of Nationwide Payment Systems Inc., brings a payments perspective to the digital-asset conversation. The company works with businesses across retail, restaurants and hospitality, B2B and wholesale, e-commerce, SaaS and other complex payment environments.

That experience informs a straightforward warning from Kopelman: “Traditional financial institutions should remember that digital assets are not just another product category. They introduce different risks around custody, regulation, cybersecurity, liquidity and customer education.”

Those risks make the pace of adoption important. A financial institution may have strong existing controls, but those controls may not automatically address the specific mechanics of digital assets.

“The opportunity is real,” Kopelman says, “but moving too quickly can create reputational and compliance problems.”

Rather than avoiding innovation, Kopelman recommends establishing boundaries around the types of digital-asset use cases institutions are willing to support.

“Banks should focus on regulated, transparent use cases, strong risk controls and clear customer disclosures,” he says.

Kopelman advises that financial institutions must also learn why customers are interested in digital assets in the first place: faster movement of money, greater accessibility and new investment options.

That distinction can help institutions separate the technology from the underlying customer need. In some cases, customers may be seeking faster settlement or easier access to financial products rather than a particular digital asset. Understanding that motivation can help leaders determine which use cases warrant investment.

Kopelman says the broader challenge is introducing new capabilities without weakening the trust customers already place in traditional financial institutions.

“The goal should be to innovate without sacrificing the trust that makes traditional financial institutions valuable,” he says.

That trust becomes especially important as customers encounter unfamiliar custody structures, new forms of volatility and different transaction mechanics. Institutions entering the market can therefore distinguish themselves through clarity as much as technology.

Develop the Foundation Before Scaling

• Put governance at the beginning of the digital-asset strategy. Institutions should define acceptable risks, controls and responsibilities before products reach customers.
• Rework the operational plumbing. Custody, settlement, reconciliation and auditability need to account for how blockchain-based transactions differ from traditional financial workflows.
• Make customer education part of the offering. Customers need clear explanations of custody, volatility, ownership structures and the risks associated with different forms of digital-asset exposure.
• Build flexibility into compliance frameworks. Regulatory requirements can evolve across jurisdictions, so institutions need frameworks that can adapt as rules develop.
• Prioritize transparent use cases. Strong controls and clear disclosures can help institutions introduce digital assets without treating innovation as a reason to relax established risk disciplines.
• Understand the demand beneath the asset. Customers may be seeking faster payments, greater accessibility or new investment options rather than simply wanting exposure to a particular digital asset.

The Opportunity Is In Building Trust

For TradFi institutions, adding digital assets is ultimately a test of whether established financial disciplines can adapt to a new technological environment. Governance, custody, settlement, compliance and customer education cannot sit outside the product strategy. They are part of the strategy.

As digital assets become more integrated into financial services, institutions have an opportunity to bring something valuable to the market beyond distribution—pairing emerging technology with established expectations around accountability and trust. The institutions that approach the category as a long-term infrastructure and risk-management decision can help shape how digital assets become part of the broader financial system.