John Wu, President of Ava Labs the Avalanche developer, discusses the need to break down silos for digital assets in this opinion piece.
In financial services, innovation often stalls not because of technological limitations, but because of a reluctance to change a widely entrenched mindset. While institutional adoption of blockchain and digital assets is now rapidly picking up pace, this challenge has been present since the outset. The barriers aren’t purely technological – they’re conceptual. To fully realize the promise of crypto, financial institutions must confront a fundamental operational shift: moving from an account-based world to a wallet-based one.
In traditional finance, everything is account-based. Your Apple stock sits in one brokerage account. Your checking and savings live in a bank account at J.P. Morgan. Your mortgage is serviced through yet another portal. Each of these accounts is a silo, tied to an institution, managed through centralized infrastructure. We’ve learned to navigate this fragmented world by stringing together middleware, APIs, and reconciliation tools. But the user experience – both retail and institutional – remains cumbersome, opaque, and slow.
Contrast that with the world of blockchain, where everything flows through the wallet. Whether it’s stablecoins, NFTs, tokens, or digital identity credentials, all digital assets can live in one place, directly under the user’s control. There’s no need for separate accounts with separate intermediaries. The wallet is the user’s gateway to the entire ecosystem. It’s not just a new interface – it’s a new mental model.
This shift challenges long-held assumptions in traditional finance. For generations, institutions have thrived on custody, control, and layered intermediation. However, in a wallet-based world, value and ownership are composable and portable. Self-custody becomes not only possible but practical, and with it comes the potential for radically streamlined operations, lower overheads, and enhanced client trust.
Of course, this transition won’t happen overnight. Existing infrastructure isn’t built to accommodate wallet-centric logic. Risk, compliance, and custody models are deeply entrenched in account-based frameworks. To wait for the perfect ‘bridge,’ however, entirely misses the point. The real leap is not technological, it’s cognitive.
Institutions that truly want to position themselves for the next era of financial services need to reimagine how value is held, moved, and controlled. They need to design systems not around institutional accounts, but around interoperable wallets. They must stop thinking in terms of accounts to be managed, and start thinking in terms of assets to be owned.
The future of finance won’t be defined by how many APIs we can string between old and new systems. It will be defined by who is willing to adopt a wallet-based mentality – and build for a world where the user is the platform.
It’s not just a change in infrastructure. It’s a change in mindset.
