Crypto Lenders Adopt Traditional Banking Standards Amid Institutional Hesitation

A growing number of crypto lending experts are advocating for the adoption of traditional banking standards to attract institutional capital into the market.

According to a panel discussion at Consensus Miami 2026, institutional borrowers are increasingly hesitant to engage with decentralized finance (DeFi) structures due to their complexity and lack of transparency.

The panelists emphasized that institutions require clear and standardized contracts, transparent custody arrangements, and clearly identified counterparties before they can consider entering into crypto-backed credit agreements.

Lygos CEO Jay Patel highlighted the need for borrowers to 'underwrite the lender' before engaging in any bitcoin-backed credit arrangement, while Ledn CEO Adam Reeds stressed that a borrower's primary concern should be where their bitcoin is stored.