Institutional Lenders Shift Away from Complex DeFi Structures

Institutional lenders in the cryptocurrency space are adopting a more traditional approach to lending, prioritizing transparency, standardized contracts, and clear risk controls. This shift is driven by lessons learned from the 2022 crypto lending collapses, which highlighted the importance of predictable behavior, legal accountability, and identifiable intermediaries.

According to experts at Consensus 2026 in Miami, institutional borrowers are increasingly scrutinizing where bitcoin collateral is stored and whether lenders rehypothecate assets. This reflects a growing demand for more traditional finance-style practices, which emphasize transparency and standardized processes over complex decentralized finance (DeFi) structures.

Speakers at the event argued that the future growth of bitcoin-backed credit will depend less on decentralization and more on standardizing practices to resemble traditional finance. This includes providing clear risk controls, transparent custody, and identifiable counterparties.