Morgan Stanley Executive: DeFi to Integrate Into Traditional Finance Within 5 Years

Jed Finn, Head of Asset Management at Morgan Stanley, stated that decentralized finance will be fully integrated into the traditional financial system within the next five years, speaking at the Consensus 2026 conference. According to Finn, the term "DeFi" may eventually disappear as traditional financial institutions increasingly adopt blockchain-based services.

DeFi Integration Into Traditional Finance

Finn explained that traditional financial institutions will increasingly adopt blockchain-based financial services and integrate them with existing financial infrastructures. "Traditional finance will absorb DeFi," Finn stated, adding that at the end of this integration process, DeFi will be seen not as a separate sector, but as a natural part of the financial world.

Morgan Stanley's New Crypto Product

Morgan Stanley is developing a new crypto-focused financial product designed to streamline asset management for clients. The system will allow clients to transfer crypto assets held on various platforms to their Morgan Stanley accounts. These assets can then be converted into exchange-traded funds (ETFs).

Product Features and Benefits

Once converted to ETFs, users can employ these assets as collateral to obtain loans. Finn highlighted that this model offers significant advantages for investors, particularly the ability to access liquidity without selling their underlying assets. The structure also does not trigger a taxable sales transaction, according to Finn.

Institutional Adoption Accelerating Sector Growth

The recent increase in interest from major financial institutions in crypto assets is accelerating the institutionalization process of the sector. Experts expect the integration between traditional banks and blockchain-based financial applications to deepen further in the coming years.