A collaborative initiative has been launched by OMFIF to explore the integration of public blockchain systems within the traditional financial landscape, particularly focusing on banks. While the advantages of blockchain technology for the finance sector are becoming more widely recognized, the use of public, permissionless blockchains poses significant regulatory hurdles for banking institutions. In response to these challenges, private blockchains have emerged as an alternative, providing distributed ledger capabilities without the exposure associated with public networks. However, the shift to private systems comes with its own set of complications and trade-offs.
Recent movements among U.S. policy-makers and financial institutions signal a growing acceptance of digital assets, reinforcing the importance of overcoming regulatory barriers to public blockchain adoption. As leading U.S. institutions venture into this realm, it is anticipated that other nations will follow suite. For this evolution to proceed swiftly and securely, it is crucial for regulators and decision-makers within traditional financial institutions to grasp the functionalities of public blockchain protocols, thereby allowing for the development of an effective policy framework. This process includes dispelling persistent misconceptions, showcasing the ability of public blockchains to serve as a robust and scalable infrastructure for financial markets, and identifying regulatory constraints that may hinder their implementation.
Between May and September 2025, OMFIF convened a working group comprising experts from Stellar Development Foundation, Ripple, Aptos Labs, Minsait, and Hedera, in six private meetings. These discussions focused on understanding the technical attributes of public blockchains and identifying policy strategies to facilitate their use by established financial entities.
Candace Kelly, chief legal and policy officer at Stellar Development Foundation, highlighted the initiative’s potential to engage policymakers and regulators, asserting that public blockchains can enhance the efficiency, speed, and cost-effectiveness of banking services while complying with the rigorous standards set by traditional finance. Matthew Osborne, policy director for UK and Europe at Ripple, emphasized the transformative potential of public blockchains as “digital highways,” enhancing liquidity and transparency and enabling innovation that private ledgers cannot match.
The initiative aims to distill the conversations from these meetings into a comprehensive report featuring policy recommendations shaped by participant insights. Solomon Tesfaye, chief business officer at Aptos Labs, noted that collaboration with OMFIF and industry leaders reinforces the commitment to build a secure, scalable public blockchain infrastructure that aligns with regulatory requirements, ultimately fostering a more inclusive financial ecosystem.
Hedera and Minsait expressed pride in their involvement with OMFIF, emphasizing the potential of interoperable permissionless blockchains to revolutionize financial services through increased transparency and diminished vulnerabilities.
The concluding report from this working group is set to be unveiled at the Insights Forum during the upcoming Singapore Fintech Festival, alongside a high-level roundtable to discuss its findings. OMFIF will also host a virtual launch, providing an opportunity for participants to showcase their contributions to developing a resilient financial ecosystem centered around public blockchain technologies.
Katie-Ann Wilson, managing director of OMFIF’s Digital Monetary Institute, underscored the importance of this initiative, stating, “We are at a tipping point for the integration of blockchain into the financial system.” She stressed that while the technology has evolved and its benefits are clear, progress will only occur if both regulators and technologists work together to bridge understanding. This collaborative approach aims to forge a responsible and innovative pathway forward in the integration of blockchain within the financial sector.
For those interested in this evolving discussion, registration for the virtual launch is open, and subscriptions to OMFIF’s newsletter are available for ongoing updates.
