These Challenges Affect Institutional Crypto Adoption Strategies (Survey)

A new survey by the blockchain infrastructure provider P2P.org has unveiled some challenges and trends affecting institutions’ crypto adoption strategies. It also highlighted opportunities that institutions could explore to adapt to the evolving practices in the crypto industry.

The survey included participation from more than 15 institutional players, with intermediaries, investment funds, and venture capital funds making up 46%, 31%, and 23% of the respondents, respectively. It is worth mentioning that intermediaries in this context refer to companies that manage assets on behalf of others, while institutions as a whole are those with large total value locked.

Trends Affecting Institutional Crypto Strategies

According to the results sent to CryptoPotato, 33.4% of respondents said the biggest challenge faced by their company is integrating new crypto yield products aligned with their risk tolerance. Another 13.3% revealed that regulatory compliance affects their ability to incorporate new products in their offerings.

Additionally, 6.67% of the participants said it is difficult to find the right strategy for allocating crypto assets, while another 6.67% disclosed that integrating multiple yield solutions at a go has been a big challenge. Interestingly, 6.67% of the respondents attributed their biggest challenge to custodians limiting product functionality, while the remaining 33.29% mentioned other challenges not outlined in the report.

P2P.org identified risk as a recurring theme during the interviews, and it was mentioned across multiple levels, including technology, operations, and regulation. For technology, the respondents insisted that smart contracts pose a risk to their organization’s security and reliability.

Challenges In Operations and Regulation

In operations, the surveyees explained how certain blockchain mechanics could affect the movement of funds across industries. For instance, withdrawing funds from staked tokens could make the assets unavailable for some time, limiting how quickly capital can be redeployed to other business areas.

When it came to regulation, the participants disclosed that one of their biggest challenges was integrating a new product that was in line with the regulatory guidelines for their business region.

“The involvement of legal and compliance team here is critical to assess the exact risk factor. As reported in one of the interview, failing to correctly assess the regulatory layer can affect the resources allocated to a new product initiative, which might later be deemed unacceptable by regulatory authorities,” P2P.org stated.

With regulatory requirements posing a significant challenge, these institutions are facing limitations in product integration and innovation.