Ark Invest challenges a16z’s blockchain-only thesis as public chains control 75% of stablecoins while private networks lead tokenized assets.

Ark Invest Pushes Back on a16z

A growing debate is emerging over the future relationship between traditional finance (TradFi) and decentralized finance (DeFi). The discussion intensified after venture capital firm a16z argued that financial institutions are primarily interested in blockchain technology rather than fully embracing decentralized finance.

Ark Invest has strongly challenged that conclusion. Lorenzo Valente, Director of Crypto Research at Ark Invest, described the argument as overly pessimistic and too narrow to reflect what is happening across digital asset markets.

The disagreement centers on a fundamental question: Will major financial institutions ultimately prefer private blockchain networks under their control, or will they increasingly rely on open public blockchains that support decentralized applications and global participation?

According to a16z, recent developments suggest institutions favor controlled environments. The firm pointed to projects such as Circle’s Arc Chain, designed for institutional stablecoin payments, and Canton Network, which focuses on privacy and compliance for tokenized assets. It also highlighted initiatives from SWIFT that aim to modernize payments and asset settlement through blockchain infrastructure.

These examples support the view that financial institutions want blockchain efficiency without adopting the open and permissionless nature commonly associated with DeFi.

Public Chains Show Market Strength

Ark Invest argues that the broader market tells a different story. Valente highlighted the success of tokenized treasury products, including BlackRock’s BUIDL fund, which operates on public blockchain infrastructure.

He also emphasized the continued growth of leading stablecoins such as USDT and USDC. Their widespread adoption suggests that users, businesses, and investors continue to favor networks that offer open access and broad interoperability.

Several key data points support Ark Invest’s position:

• Ethereum and Tron account for nearly 75% of global stablecoin activity.
• USDT and USDC remain dominant settlement assets across public networks.
• Major financial companies, including Mastercard, Visa, Stripe, and PayPal, have integrated stablecoin-related services.
• Tokenized treasury products are increasingly being launched on public blockchain ecosystems.

Valente believes private chains risk becoming isolated systems unless they eventually connect to larger permissionless networks that offer liquidity, users, and innovation.

Tokenization Remains TradFi Territory

Despite public chains leading stablecoin adoption, tokenized assets present a more nuanced picture. Corporate and institution-focused networks currently hold a commanding advantage in this segment.

Research shows that Canton and Provenance collectively control approximately 85% of the tokenized asset market, while Ethereum accounts for roughly 4%. This demonstrates that traditional financial institutions still prefer specialized infrastructure when handling regulated securities and large-scale asset tokenization.

The emergence of new enterprise-focused networks, including Stripe’s Tempo and Google Cloud Universal Ledger, further highlights institutional demand for private or semi-private blockchain environments.

The data suggests that neither side has fully won the argument. Public blockchains dominate stablecoin payments and open financial applications, while corporate networks remain the preferred choice for tokenized assets. Rather than replacing one another, TradFi and DeFi appear to be evolving along parallel paths, with convergence likely occurring where efficiency, compliance, and market demand intersect.