An Open Letter to TradFi Institutions Launching DeFi Initiatives 

To all the companies announcing DeFi-related initiatives: 

Welcome!

We have read your press releases for new crypto integrations, pilots, and tokenized funds. We have listened to your earnings calls about transformative partnerships and blockchain-based future of finance experiments. We know that your strategic offsites are resulting in exciting, new product roadmaps and business strategies.

Frankly, we are thrilled you’re embracing technology innovations that will serve as infrastructure for 21st century finance. You are coming to understand that open-source, permissionless, programmable, noncustodial, globally accessible, and interoperable technology presents major upgrades for certain parts of the financial system. 

If you’re going to rely on DeFi or connect your customers to DeFi, we at DEF invite you to join us in helping to protect the technology and infrastructure that makes it valuable. 

Here are some DeFi policy objectives worth defending: 

1. Protect Software Developers and Infrastructure

If you want to use it, you have to protect the people building it. Software developers who write code but don’t control other people’s money should not be treated like financial intermediaries. And the code itself shouldn’t be either. Just like you can’t regulate the open internet, you can’t regulate blockchain infrastructure itself. Support clear guardrails that distinguish neutral software from regulated financial services.

2. Preserve Self-Custody 

DeFi works because users can interact directly with smart contracts and maintain control over their assets and data. Self-custody is a key design feature of DeFi. And that’s good for you! It means you don’t have to worry about losing or leaking your customers’ assets or data to hacks and exploits. Policies that attempt to force all activity through centralized intermediaries undermine the core security and resilience benefits of blockchain networks. Embrace noncustodial systems instead.

3. Advocate for Open Access and Interoperability

One of DeFi’s core advantages is composability (the ability for smart contracts and protocols to plug into and build on each other like financial building blocks) and interoperability (the ability for different systems or blockchains to communicate data). But this only works when infrastructure remains open access and transparent, making it easy for all of you to use DeFi yourselves and on behalf of your customers. Encourage rules that support the development of open systems through technology-neutral standards. 

4. Champion Permissionless Blockchain Infrastructure and DeFi Markets

Advocate for laws, policies, and regulations that incentivize building permissionless systems and protect people’s ability to control their own digital assets and to engage in disintermediated transactions on permissionless networks. Practically, that means that rules must recognize the fundamental distinctions between noncustodial, decentralized software (and those building it) and centralized intermediaries who control customer assets and data. Don’t equivocate! There is a place for permissioned systems, but that place is called onchain finance, not DeFi.

5. Support Clear Laws and Policies

Blockchain technology and DeFi fundamentally shift the way people engage with finance by removing intermediaries and trust dependencies. Because of this, traditional regulatory categories do not map cleanly onto decentralized systems. Instead of advocating for square pegs to be jammed into round holes, call for fit-for-purpose bipartisan rules and regulatory frameworks for digital assets.

As you all interact with decentralized infrastructure, your voice can play a constructive role in shaping thoughtful and durable policy outcomes. Support legislative and regulatory initiatives that foster clarity, reduce uncertainty, and enable responsible participation across both centralized and decentralized markets.

Thank you for taking DeFi’s tools and technology seriously, and we hope you will join us in defending the policy principles that make building and using DeFi possible.

– The DeFi Education Fund Team

P.S. Looking for tech explainers, one pagers, or demos to help explain how all of this works to your colleagues? See our Knowledge Base for a DeFi 101, explore our DeFi Dictionary, read the latest in our DeFi Debrief weekly newsletter, and more.