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DeFi's path to mainstream adoption runs through bank back offices, not trading desks — but only if the protocol layer stops bleeding first, asset management and banking executives said at the Proof of Talk conference in Paris. April was DeFi's worst month for security in four years by CertiK's count, with breaches reported on 27 of 30 days, and North Korean-linked hackers alone drained nearly $600 million from Drift Protocol and Kelp Dao.
Maja Vujinovic, CEO of investment advisory firm OGroup, framed the issue as existential for the sector: "I don't think you see a growth in DeFi until we fix the first problem ... which is the hacks." Vujinovic singled out bridges between blockchains as the structural weak point, arguing DeFi will stay confined to the "degen community" until the full stack of vulnerabilities is addressed. Solstice CEO Ben Nadereski echoed that read, blaming developers who ship innovative code without adequate attention to the core discipline of managing other people's capital.
Why it matters
The timing matters because the institutional capital that DeFi has courted for half a decade is finally circling with mandates to deploy — Société Générale's Forge unit, which already tokenizes structured products and green bonds on public chains, has been forced to build its own regulated stablecoins (EURCV and USDCV) because no existing onchain cash leg met bank-grade standards. Forge chief strategy officer Stéphanie Cabossioras said the gap between open DeFi and what institutional clients will accept is philosophical: "we want to delegate this peace of mind to a third party," she said. That preference for regulated custody over self-custody is the wedge that determines whether the next trillion in TradFi flows onchain or stays parked.
Market impact
Franklin Templeton CEO Jenny Johnson made the bear case for incumbents in a separate panel: blockchain threatens lucrative fee-based business models built on intermediating transactions, which is exactly why major financial firms are slow to adopt public chains even as the cost savings are obvious — her firm's tokenized money market fund Benji runs on Stellar at a fraction of traditional rails.
Frequently asked questions
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Why are bank executives saying DeFi can't win over big banks yet?
Executives at the Proof of Talk conference in Paris argued that persistent security failures — especially in bridges linking blockchains — will keep institutional capital sidelined until the vulnerability stack is addressed, with DeFi otherwise confined to the 'degen community.'
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How bad was DeFi security in April according to CertiK?
CertiK CEO Ronghui Gu described April as DeFi's worst security month in four years, with breaches reported on 27 of 30 days. North Korean-linked hackers alone drained nearly $600 million from Drift Protocol and Kelp Dao across two exploits.
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What is Société Générale's solution to DeFi's gaps for institutional clients?
Société Générale's Forge unit tokenizes structured products and green bonds on public blockchains and has built its own regulated stablecoins — EURCV and USDCV — to provide the onchain cash leg that bank-grade institutional settlement requires.
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Where is institutional capital likely to flow in the near term instead of permissionless DeFi?
The executives pointed to regulated tokenization corridors such as SG-Forge, Franklin Templeton's Benji tokenized money market fund on Stellar, and bank-issued stablecoin issuers — walled-garden onchain products rather than open DeFi protocols.
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What did Franklin Templeton CEO Jenny Johnson say about TradFi adoption of blockchain?
Johnson said major financial firms are slow to adopt public blockchains because the technology threatens lucrative fee-based business models built on intermediating transactions, even though her firm's tokenized Benji fund runs on Stellar at a fraction of traditional rail costs.
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