Institutions are demanding stronger blockchain security from the crypto industry following recent DeFi attacks, State Street reported Monday. Angus Fletcher, head of the firm’s digital assets division, stressed that vulnerabilities must be resolved before trillions in real-world assets move onto public ledgers.
Security Demands Grow
State Street’s analysis shows institutional investors are holding back from RWA projects until security improves. The push follows multiple high-profile DeFi protocol breaches this month. Institutions see these incidents as proof the sector can’t handle large-scale asset tokenization yet.
Fletcher’s Warning
Fletcher stated plainly that security must be addressed before trillions in RWAs get tokenized on-chain. He noted the industry’s current infrastructure isn’t built for institutional-grade risk management. The timing isn’t great with major asset managers preparing tokenization pilots.
Next Steps for Institutions
Investors are now requiring exchanges and protocol developers to implement third-party security audits before onboarding institutional capital. State Street expects this to shape the industry’s development roadmap through 2026. They’re pushing for standardized security frameworks within six months.
