Well, hello. How nice to see you all here and welcome to Ecom New York. My name is Kla Adelan , and I am the Global Blockchain Leader at EY. And today, oh, you don't see the title of my session, but the title of my session is "From Pilot to Production and the Institutional Journey to Onchain." Uh Institutional Journey to Onchain."
Uh , I think the name reflects the current state of the market very well. So I'm going to share with you some of my thoughts on what that path looks like, and what the readiness of institutions for production looks and feels like, and why I'm personally very optimistic about it. Just to step back a little, some have some context. In the early days of railroads, uh, people, of course, paid a lot of attention to trains, and at that time they argued a lot about speed, they argued about freight, they argued about destinations, and then over time, uh, the biggest story turned out to be not about any particular train. The bigger story was about the rail network itself and how the infrastructure changed the whole economy and how the whole economy moved.
And then, similarly, the invention of the automobile did not, by itself, create the modern transportation system transportation system . It only happened when . It only happened when societies started investing and building roads, setting safety standards and, uh, the institutions around these rules that were necessary. This is what the scale looks like. And so I think there are a lot of parallels when you look at this knowledge with where we are with blockchain technology today.
Uh, for many years, the focus has been on cryptocurrencies, token economics, and they can be seen as the first vehicles on rails, if you will, uh, the first things on the track. But the biggest shift happening right now is in the rails themselves, the infrastructure, and that underlying infrastructure that deals with moving assets moving assets , establishing value, and, uh, coordinating trust in a programmatic way, and the rules and standards, uh, that are required to operate at scale. If you look back a few years, the institutional conversations were very different than they are today. Uh, they really focused on blockchain, which was still considered an experiment, and, uh, the focus was generally on pilot projects and PCs. Um, there were a lot of collaborations and consortia that were formed, um, very often in a controlled environment, um, sometimes non-aligned models, sometimes hybrid, um, semi-separate models.
Um, it gave institutions the opportunity to explore without taking on full operational commitments. And this caution makes sense. Um, I didn't evaluate the new technology, um, whether it really, um, the technology meets the standards. They were actually trying to figure out if there was a way to meet the standards required for real markets or real assets, real customers, and whether it could meet the standards for rigorous, um, regulatory oversight. This is, um, a different formulation of the problem.
If we move forward to 2026, the conversation today is very, very different. Um, industry perspectives from the World Economic Forum to blockchain.com, whatever. Everyone is talking about a very broad shift, and it's a shift for blockchain, moving from experimentation to, um, more, um, corporate deployment, tokenization, and digital assets becoming a real part of the fabric of, um, mainstream, um, financial infrastructure. And we see this flurry of big banks making headlines about new products.
Um, we see, uh, regulators creating regulators creating , uh, better, and, uh, I would say, clearer lines of interaction between regulators and us and being able to show the way. And we see a growing stream of, uh, real assets queuing up to be placed on the network, uh , for issuance, uh, maintenance, and distribution. And so I think the question that has shifted now is not whether this technology can work technology can work . I think the focus now is on whether institutions can implement it at scale in a way that is reliable, manageable, compatible, and has real business real business value. Uh, and for me, that's what going from a pilot to a production project really means.
So why now? Why is this moment a little different from other cycles of enthusiasm we've had? Uh, regulation had? Uh, regulation is definitely part of it. I think we all felt it last year.
Uh, that was definitely a catalyst, and that's an important part. uh, the clearer policy frameworks they bring, uh, they reduce uncertainty and thus give institutions more confidence to move from observation to action. So, no doubt, that's a really important piece of the puzzle, but, uh piece of the puzzle, but, uh , it's not the whole story. And I think, uh, the reason this moment feels so different is because there are a number of other things happening at the same time that are starting to align. So, the technology has matured.
This is a really important factor. The economy is becoming much more efficient. I think efficient. I think privacy and, uh, confidentiality, uh confidentiality, uh , are improving, and I think, uh, interoperability, and we've heard a lot about this in the last two or three days, actually, interoperability is getting a lot more serious attention. And so the combination of all these things gives institutions, uh, a more robust path to innovation, from innovation to implementation.
Uh, at EY, I think we've been of the opinion for a long time that, uh, large-scale implementation, real large-scale implementation, uh, will only happen when multiple things are implemented at the same time. And so the public blockchain the public blockchain infrastructure, which has always been very important to us, had to be ready. The price had to be such that it made sense for large-scale, er, use cases, and the privacy had to be sufficient for industrial use. Hmm, and all of these are technical challenges to some extent. Hmm, the technical challenge was necessary but never sufficient.
I think technology is a bet. Institutional readiness has always been what unlocked all this momentum, at least in our view, and I think that's where the conversation has shifted. Uh, for many, many years, the industry has focused on , uh, can this work? Or on variations of this question, uh: can assets be represented on- chain? Can the calculations be improved the calculations be improved ?
Is it possible to automate workflows? Can new rails be built? Hmm, now the questions are much more important: can this work in a way that institutions can trust, manage, control, and scale. And this is a fundamentally different challenge. Uh, going from pilot to production isn't just about taking the same idea and making it bigger.
Uh, that's a bit of a mistake. I think it's about moving from technical feasibility to institutional functionality. So this next wave that's ahead of us, the work that's going on right now and that's keeping us all busy, is not going to be defined by innovation. In my opinion, it will be determined by industrialization. Going back to those, um, metaphors I gave you at the very beginning.
It's about whether blockchain can be embedded into real operating models, real control environments, and, um, real business and, um, real business outcomes. So what does production readiness really mean when it comes to institutions? Right? We've talked about the technical aspects, but production readiness, I think, means, um, a number of other incredibly important things that need to be implemented. Um, that means, um, thinking seriously about trust and governance.
Who is responsible? Hmm, how will decisions be made ? How are the participants coordinated? Um, how do institutions, um, trust not just the technology, but also the ecosystem and the rules defined for the ecosystem in which they operate? I think the second one is about compliance and control.
Production systems must withstand audit, risk management, regulatory oversight, operational discipline, and the legal and operational implications of deployment implications of deployment . They are no longer something like theoretical, they are immediate. So you really need to implement these things. This means compatibility with legacy systems. Institutions don't replace everything overnight, do they?
You will have to connect workflows to the existing infrastructure on the network. These can be records, controls, corporate environments, and architecture. If that doesn't happen, I think the scale will still remain unattainable. So it has to happen. And also, I think confidentiality and privacy.
Institutions cannot move sensitive data, transaction data, customer data, to environments that do not meet privacy expectations. This is why, in my opinion , privacy prefers to preserve infrastructure and selective disclosure of information, which becomes such an important part of the next phase. Uh, that's also one of the reasons why EY has invested so much over the last few years in really answering the question of how to build privacy into a public blockchain public blockchain to meet privacy standards in the B2B world and how it actually works. And then there's a fifth question that I think we need to keep in mind about what industrial readiness actually looks like. Hmm, and this is a relatively simple question, but it will come up in every business case you come across, namely: is there measurable business value?
Uh, it won't be a theater of innovation as institutions scale. It's quite the opposite. It's about what value is being created value is being created . Is there a more efficient, uh, faster way? This could be faster calculations.
This could be improved liquidity. It could be anything. But there has to be a very clear and measurable business measurable business value that is created to support the activities support the activities I just described I just described . And this is the work that is actually being done now. Um, we're talking about institutional production-ready on-chain infrastructure.
It includes all the things I mentioned that should be associated with it. Not only technically possible, but also manageable, compatible, connected, confidential, and valuable to institutions. So they can support it. Um, so this is the moment we're entering now. Um, what does this mean for leaders and institutions?
This means we're leaving a point in time where, um, I think time where, um, I think , pilot projects alone are enough to demonstrate progress. Um, I think the next stage will belong to institutions belong to institutions that can move from curiosity to opportunity and, in fact, opportunity and, in fact, from experimentation to execution. And this is the execution phase. Um, the opportunity is indeed real, and the momentum is very real. Um, success in the next chapter, um, will not necessarily be determined by who is the loudest about innovation and the most innovative or new ideas.
I think it will be defined by those who can't actually put these ideas into practice, um, as a corporate infrastructure with the discipline, control, and strategic intent strategic intent that institutional implementation really requires. Um, the question isn't really whether blockchain is the future. I think the question that institutions are really looking at is whether they are ready to build this future at a production level. Hmm production level. Hmm , and to me, that's what this path looks like, and what we should all be, I think, really excited about in this room.
I think this is where the next phase of growth will come from. Hmm, and this is just the beginning. At EY, we take a very close look at digital assets, and it's a big part of what we do every day. Hmm, and there's a lot of work going on right now, but ultimately we always saw this as something saw this as something that would radically change the way businesses interact and transact. Hmm, and so the use cases go far beyond what we see today.
Uh, and this is the way. So I thank you all for your attention. Hmm, and, uh, and I hope you enjoy the rest of the conference.
Automatic transcript — names and jargon may be misspelled.