Interview with Marcus Chen | Head of Digital Assets | Former VP at Goldman Sachs

Marcus Chen spent 12 years in traditional finance before jumping into crypto. Now he helps institutions navigate DeFi infrastructure. We talked about why banks are finally taking the plunge.

2049.news: Banks in DeFi sounds like an oxymoron. What changed?

Marcus Chen: Risk management caught up with opportunity. Two years ago, institutions saw DeFi as the Wild West — unregulated, dangerous, full of rugs and exploits. That perception wasn't wrong. But the infrastructure matured faster than anyone expected.

Today we have institutional-grade custody solutions. We have on-chain compliance tools. We have insurance protocols that actually work. The risk profile shifted from "unacceptable" to "manageable."

2049.news: Which DeFi sectors attract institutional money first?

Marcus Chen: Lending and yield, without question. Banks understand lending — it's their core business. When they see Aave or Compound generating 4-8% yields on stablecoins with transparent collateralization, they recognize the model. It's not alien. It's just more efficient.

Liquidity provision comes second. Market making is another thing banks know well. Providing liquidity on Uniswap v3 or Curve isn't conceptually different from what they do in forex markets. The mechanics are just on-chain.

2049.news: What's the biggest barrier right now?

Marcus Chen: Compliance. Not technology, not risk — compliance. Every institution I work with asks the same question: "How do we prove to regulators that we know who we're transacting with?"

DeFi was built on pseudonymity. That's a feature for retail users, but it's a dealbreaker for banks. The solution isn't to make DeFi less private — it's to create permissioned pools where KYC'd participants can interact.

We're seeing this already. Aave Arc launched with whitelisted addresses. Maple Finance does under-collateralized lending to verified institutions. This parallel track will grow significantly in 2025.

2049.news: Does that defeat the purpose of decentralization?

Marcus Chen: I hear this criticism constantly. My answer: DeFi isn't one thing. Permissionless pools will continue to exist for users who value privacy and self-sovereignty. Permissioned pools will serve institutions who need compliance.

The underlying technology remains decentralized. Smart contracts don't care whether the wallet belongs to a hedge fund or a teenager in his bedroom. That's the beauty of it. We're just adding an optional compliance layer on top.

2049.news: What's your prediction for institutional DeFi TVL by end of 2025?

Marcus Chen: Conservative estimate: $50 billion in institutional-focused DeFi protocols. Aggressive estimate: $120 billion. The variance depends entirely on regulatory clarity in the US and EU.

If we get clear guidelines — not necessarily favorable, just clear — institutions will move fast. They have the capital. They have the interest. They're just waiting for permission.

2049.news: Any specific protocols you're watching?

Marcus Chen: I can't name specific investments, but I'll tell you what categories matter. Real-world asset tokenization is huge — protocols that bridge traditional securities onto blockchain rails. Institutional-grade derivatives platforms. And cross-chain infrastructure that lets capital flow between ecosystems without friction.

The winner won't be the most innovative protocol. It'll be the one that best balances innovation with institutional requirements. That's a different optimization target than what DeFi has pursued so far.

2049.news: Final thought for our readers?

Marcus Chen: The line between TradFi and DeFi is dissolving. In 5 years, we won't distinguish between them. Your bank will use liquidity pools behind the scenes. Your brokerage will settle trades on-chain. You won't know or care.

The people building that infrastructure today — they're building the financial plumbing for the next century. That's not hype. That's just what's happening.

Marcus Chen advises institutional investors on digital asset strategy. He previously led digital asset initiatives at Goldman Sachs and holds an MBA from Wharton.