EN | The Institutional View on 2026 Market Direction and Expectations | MERGE São Paulo

So for the first panel, I'm going to introduce with my speakers. We are going to talk about the institutional views on the ecosystem. So please like welcome to the stage to Curdi de Monteverde. He's the head of crypto and digital assets at Banco Santander. Andrew from Defi Technologies, Defi Technologies.

Jonathan, he is the CEO of Chainalysis. And Peter, that is the vice president of Bullish. So an amazing panel. Welcome here. Perfect.

So we are going to start talking about 2026 uh views, the institutional views. I think that 2025 was like a very different year. Like institutional adoption came. But in Europe, the banks already got the like the green light to start operating with with crypto assets. So it has been like a very important year for the ecosystem.

So first of all, we are going to go into different views, right? Because we have like liquidity providers, we have a bank, we have a transaction monetary tool, we have all the financial decentralized finance technology applied. So we are going to go into the different views. But first of all, like general, how you are seeing the space? How you have seen like this shift in the last year for the institutional views?

I'm going to say something very obvious that you already know, but I think that the huge change during the last 12 months has been the the progress of regulation globally. So we've got Mika already in place in in Europe, genius act in the US. Also banks now in the US can officially provide a crypto custody services. Brazil new regulation as well and and that's I think it's a what we needed the banks to get into the this space. Yeah, from our perspective as DeFi Technologies and Valour, we're an asset manager.

And what we found, uh for instance, in our presence here, we've been able to launch uh five exchange-traded products on the B3 here in Brazil. And what we found is there has been a softening of the line. Uh there's there uh there has been a softening of the line. But can you hear me still?

now it is starts like the other state, so It's okay.

to use the headphones.

Oh, perfect. Okay. So, there's been a softening of the line between crypto and traditional finance. More and more, we're seeing institutions have an increased appetite for access to digital assets that are wrapped in traditional wrappers. And we find consumers too are far more comfortable with exposure to digital assets.

So, I think it's very uh bullish uh for the industry as a whole in terms of increased adoption of digital assets and crypto in portfolios. They're viewed as safe, uh banks like them, investors like them. We have Chainalysis that provides uh good support uh for all of these assets. Quite positive. Yeah, I think that um you know, from the Chainalysis perspective, we've always worked with, you know, government agencies, financial institutions, fintech companies across the world to ensure that people can make safe transactions on chain.

And I think that what we have seen over the last, you know, 18 months is that the regulatory clarity that has come out of the US has meant that people can make bigger strategic moves. And if you look at also the M&A activity that's happened over the past 12 months and you look at MasterCard's announcement this week to buy BVNK, there is serious enterprise adoption of uh blockchain rails and that's something that we, you know, couldn't have seen really happen before the regulatory clarity as Cody mentioned. And I think that if you if you look at sort of where we're at today as an industry is that still institutional adoption is about laying foundational work to be able to realize the potential of the technology. But if you look at the largest asset managers in the world, you look at the largest payment companies in the world, you look at the largest banks in the world, all of them have said very clearly that the future exists on blockchain, the future exists with tokenization of real-world assets. And you know, I think that it's still very much at the beginning stages of, you know, seeing exactly how the sequencing of that market happens, exactly where in the world adoption happens first.

And you know, I think that that's what that's what is exciting about being here in Brazil and and hearing about those local use cases. I think the biggest change that I've seen is the funding of the industry overall. I think if you were to rewind the clock back 3 years, the industry is almost entirely funded by venture capital investment. Whereas today, you're seeing the banks step in meaningfully to actually enter the space and not just kind of like a window dressing way for the earnings call. They're actually having teams build products internally.

And I can say this for myself looking at our firm's client mix. I'm a market maker primarily and my clients have been meme coins, utility coins, but mostly tokens. But this year, uh our clients are SocGen, Fidelity Asset Management, and a lot of these more mature financial institutions that are actually working with the blockchain itself. Um using AMMs to bootstrap liquidity. And so I think the biggest change is that we're almost derisked in a way because we're not solely reliant on one group of investors to keep the industry afloat.

We now have real industry groups in finance that are actually investing themselves. So I I think there's more diverse sources of funding in the industry today than there were last year. Great views, and also like let's go deep dive like in each of the different sectors, right? So Gotti, um last year it has been like an super important year in Europe for financial institutions, and in general for the sector, right? Like with the application of the new regulation, the MiCA regulation there.

So it has got given like a green light for banks to start operating with crypto. So how uh have you been living this? And above all, once that you already have crypto operating in in Europe, what's the next step? In terms of crypto products, like are we going to see the bank doing, I don't know, staking? Maybe.

Uh yeah, so for those that don't know what Santander has been doing in Europe on the other side of the Atlantic, uh thanks to MiCA regulation, uh we finally started offering crypto buy wholesale, so investment as investment product to our clients in both Spain and Germany. Uh so that was in October and and November. Uh we are seeing more and more banks getting into this business in Europe thanks thanks to the clarity of the of the regulation, but we are starting like in a with an MVP, just buy, hold, and sell, nothing else. Investment product, no in and transfers, no staking. And that's because we do it gradually, like step-by-step, then we get confidence, we get our compliance team to understand this new asset class, and then we will include more functionalities over the next months, like more tokens.

So, I'm starting just with Bitcoin and ether, then start introducing Solana, Polygon, etc. Regarding in out transfers, that's something that will come, but it's a challenge from the operational point of view. We all know that travel rule it's not easy to to follow. And that will be one. And regarding staking, hopefully in the new version of the Mika regulation is staking is included because currently it is not.

I know that in Brazil you guys can offer staking from the banks, but in Europe I I would love to, but not yet. But we'll use this time to get used to offering crypto, gain confidence, and that will come eventually. And apart from crypto products, what else are you working in the space? I mean, stable coins, etc. Yeah, so that's that's that's a good one.

So, I think there's a huge focus right now in digital money. When I say digital money, it's not stable coins, but it's also tokenized deposits, central bank digital currencies, even reserve back digital assets, which is um that's kind of a synthetic CBDC form of of money. I mean, we need the cash leg for settling tokenized assets. So, that's like the very first step. You'll see some banks that are focusing on on tokenized deposits, big corporate investment banks in the US.

Others are leaning towards stable coins, creating consortium in in Europe. And and also there's uh industry initiatives that are trying uh to join efforts in building interoperability and standards. So, all these different tokenized deposits from different institutions that initially they don't talk to each other, let's say that way. So, they can be interoperable in the in the future. And what's the main difference?

You have mentioned a lot like the that for example here in Brazil they can offer a staking, in Europe you are not. So, what main differences are you seeing in the space in terms of regulation and what they are allowing banks to do? Yeah, so I think that um so traditionally Brazil has been much more innovative than Europe. Uh in Europe we are famous uh for over-regulating and making things very difficult for the for the industry. But, I have to say that in case of MiCA that was a a huge uh catalyst for for innovation because MiCA, the the regulation in Europe is in place since a year ago, while the Brazilian regulation it's like what, two months uh old.

So, we catched up in in Europe and there's many banks already offering uh crypto. Uh the process it's it's quite straightforward. So, it doesn't take a long time to get the authorization from the regulators. And once you've got the authorization, you can operate all over Europe, which is also a very interesting. So, I think that in in that sense we've catched up.

Uh And we've got a stablecoin under MiCA as well that it's very restrictive. So, we haven't done it so well there. And I think that here in Brazil once the the new regulation is out, I mean, you'll probably have uh there an advantage compared to to us in Europe. Fantastic. Any other speaker wants to comment on these like differences between Brazil and other geographies, not only Europe, but also like United States?

Um, well, uh from our side we find that the uh uh um the Brazilian market generally has a different type of investor profile uh just in large part because the interest rates here are higher. So, there tends to be uh at at all. Oh. Oh. Okay.

So, okay. All right. So, so in the Brazilian market um where uh structured instruments that trade on the exchange and tend to trade like equities, there is more opportunity for growth there. It's relatively new because the underlying interest rate ranges between 12 and 15% for the risk-free instruments. That said, there's incredible innovation in the stablecoin space.

There is a hunger and uh frankly, the exchanges and brokerages have been very very proactive in attracting asset managers like us to list our instruments on the local exchanges. And increasingly, for instance, we'll be launching a UCITS fund. So, uh funds like this that carry the the lovely regulatory stamp of uh of European collective investment vehicles, uh there is an appetite for that even amongst institutional investors, pension funds, wealth managers. Um so, I think that that is actually very promising in this space. Yeah, I think that what one of the things that I always find super interesting about coming to Brazil is sort of the the adopt the the adoption of stablecoins and how you know, much that dominates the conversation.

And I think that, you know, Brazil was one of the first places that really had a you know, organic adoption of stablecoins for import and export. And obviously, we see that, you know the trade volumes and the transactions that are here in Brazil, there is a lot of stablecoin use for actual commerce. And you know, that's something that that is interesting also given the exchange rate environment that like people actually want these types of instruments to pay for goods and services. And so we've seen that in the data you know, pretty pretty frequently. We also see sort of the organic adoption in a retail population you know, large for the country and you know, that there are other countries where you would think that the domestic payment system PIX has you know, dominated you know, the ease for which people pay each other and businesses, but still there is crypto in and amongst that and you know, there is like this big intersection of PIX and crypto coexisting inside the market especially for import and export.

And so this is something that we we definitely see in the data Chainalysis. I would say that you know, the other thing that we have seen though is that you know, in real-time payment systems, you have greater degrees of fraud, you have greater degrees of crime that are possible to perpetrate and there have been you know, actually larger cases here in Brazil than in other in other markets where you know, PIX has been compromised in some senses from from banks and laundered into crypto and you know, we at Chainalysis have been very you know, at the forefront of thinking about how do you secure these types of faster payment systems? How do you How do you be able to meet scammers before they meet users? How do you build machine learning models to detect anomalies? How do you follow the money and recover it for for victims?

And I think that you know, one of the things that I have found very impressive in coming to Brazil over the years is that you know there is a coalition of the willing. There is a real sense that industry, fintech, banks, prosecutors, the central bank actually come together and say you know like we need to solve these types of problems. And I think that this is maybe like the next stage of everything that's happening in the world is that all payments are moving faster, lots of things are moving on chain and you know the defenders need the same level of technology as the attackers have. And so I see Brazil as someone who as a country that has to invest in this in the future and you know I see I see the beginnings of that today in the market. I've always said that the real story of crypto is an emerging market one.

In the United States and Europe, people mostly view or have viewed digital assets mostly as an investment opportunity without really attaching like an organic use case to it. And I think that's why you've had such great progress and lack of I think we tend to build the cart before the horse sometimes in the United States where we're creating a solution to a problem that people haven't even noticed yet and then we complain about there being problems on the demand side of those products. Whereas here in Latin America you have a very active user base that gives you product feedback every day. So I think just because it's more real world like use case led that the products coming out of this part of the world are sometimes more informed by the consumer and therefore have greater natural organic uptake. And we have been talking in the with Cody about use cases, what banks are doing in the space etc.

Peter, from your perspective like bullish is working of course in terms of a liquidity with a lot of institutional players. So, what use cases are you seeing in the space? What institutional players are doing in the space apart from from the banks, and how you are seeing the differences between the different geographies? Sure. Um so, I'd say the interesting trend, of course, is banks bringing stablecoins to market, but what we're seeing more and more of is just normal industries using stablecoins to settle transactions.

So, for example, this year we had a private jet leasing company, a med-tech device company, and then a salmon farming company all onboard to us solely so that they can pay their uh receivables in crypto. And, you know, these are people who had never transacted in digital assets before, but they're, you know, working from an entity, not an individual, and so they need to have a squeaky-clean setup to pay for these types of things. Um so, I think that's one interesting trend is people have been talking about uh oil being increasingly settled in USDC, but now we're seeing that spread to many other more diverse industries. Um and then the second thing I would say is we're seeing banks uh pay far more attention to on-chain analytics. Um we are the only exchange in the world that deploys AMMs, probably one of the core value propositions from DeFi at the beginning, on top of a central limit order book.

So, it's a fairly novel concept, and yet we have banks that are using our AMMs to bootstrap liquidity on chain as we speak. I thought that was an untenable proposition as soon as a year ago, um but now we have several banks using AMM products. Talking about on-chain analytics, of course, Jonathan will have the CEO of Authencity here. So, what what's your view on that? I mean, are you seeing any specific use cases, a shift of the things, any specific analytics that caught your attention?

Yeah, we've seen a lot of different, you know, trends over the over the last year. I would say that, you know, the majority of the stories are some of the things that you read in the headlines. Uh I think that if you look at, you know, stablecoins, they they are continuing to grow at a at a good pace and, you know, the amount of transactions that are being done for real commerce as well as settling financial instruments has has increased over the past year. And you know, you have a tale of sort of two stories there between, you know, USDC and USDT. And I think that in the in the case of USDC, you see it a lot used in, you know, settling financial instruments, being used in DeFi, being able to trade one asset for another.

And I think that this is a, you know, a really important use case for the cash leg of the tokenized economy. Um and then you see sort of the organic adoption of of Tether in in many different markets around the world. And you see it not being used as a settlement instrument. And you see transactions where it's just one wallet to another. And you see those as, you know, international savings accounts, international payments, um remittances, and and those types of things.

And and I think that, you know, what we will see over the course of the next few years is that, you know, stablecoins becoming, you know, again used in both contexts of uh settling financial trades and also um in real world commerce. What we um what we've also noticed uh at Chainalysis is that, you know, there is also at scale applications on chain. Um I mean, many people uh have heard of Polymarket, but I don't think people get a sense of like how big that is on chain. I think people forget that, you know, this is like a an on-chain application doing a a trades run rate a year and like that that infrastructure exists today. It's being battle tested.

All of those markets are settled on the blockchain itself. All the contracts are on the blockchain itself. And I think from, you know, Chainalysis perspective, uh we can see that there is just increasing demand from enterprises and new use cases of them actually being able to, you know, settle complex instruments on chain. And and that that creates a real challenge for Chainalysis because, you know, we have been very used to uh following the money. And, you know, that's really the data that we built the business uh in over the last 10 years.

But now we have like a very complex set of smart contract events. And, you know, the ability to um understand governance and for people to have account abstraction and smart wallets and, you know, the the infrastructure has been built that is now a lot more rich feature-wise than we've ever had before. And so what we have had to do over the past 12 months is expand and go down into the stack. Go much much closer to how smart contracts operate. And so we've built a security platform so that people can do the level of observability on how to put real assets on chain.

And so the largest um money market funds in the world that have been tokenized rely on Chainalysis not just to look at the um anti-money laundering components, not just to look at the fraud components, but actually to run product operations and actually understand, you know, the security models behind smart contracts. And talking about DeFi, Andrew, um we had an interesting discussion uh regarding uh what's really DeFi for you because we always have different concepts about decentralized finance, but it is true that what the majority of the users know as a D5 has been a bit quiet on the last year or a couple of years. It came like with a lot of strength, but now it's a bit quiet. So, what's happening on the space? How you are seeing that?

What institutions and retail users are doing? Yeah, I'm a bit of a traditionalist whenever it comes to the definition of D5. For me, the idea of D5 is any finance that takes place on a decentralized ledger. Because that's a distinction between traditional finance, which is generally centralized and taking place on exchanges, and anything that happens on a blockchain or decentralized ledger. And what I'm seeing is that adoption of decentralized ledgers, somewhat similar to what you were saying from the bullish perspective, this is becoming very intrinsic to many of our lives.

One of my pet peeves that I mentioned on that call is many of the digital assets we discuss, well, according to financial managers and the news, they call them risk-on assets. They claim they are risky just because they are associated with crypto. Well, we have to remember what these tokens are actually used for. In every instance, the digital asset tokens, the utility tokens, are generally gas fees for blockchains, first and foremost. But, whenever we issue traditional assets onto a chain, that traditional asset, if it exists, it exists on chain as a digital representation.

Now, the point that I'm getting at here is right now we're in a situation with tokenized deposits. We have governments issuing bonds and debt on chain, and this shows a broad adoption of these DeFi technologies. Well, I offer this to the audience. If you have a government or the World Bank that is issuing a triple-A rated bond instrument, a 7-year bond paying 5% rated triple-A, and they decide to issue this particular instrument at the highest rating quality, even higher than the rating quality of the United States, on Ethereum. How is it that me as a asset manager can look at Ethereum and say Ethereum is a risky asset and therefore risk on, but the triple-A rated debt that has an issuance of $500 million, $1 billion, maintains the highest credit rating in all of finance.

My background is in traditional finance. We call that an incongruity. It's not possible. And I think over time, asset managers are going to come to realize that these foundational rails that exist from the world of DeFi are actually less risky. It's a technology that is uh foundationally beneficial to everybody from sovereign issuers to investors, and as we have a different look, I think adoption will actually increase.

Let's go to do like a bit of a wrap-up regarding the panel, right? So, let's go one by one. Um if you can share, Coty, like what's your views on what's going to happen in this year and maybe in the following year if it's an specific use case that you think it's going to have um an a scale, and also like the opposite, right? If there is a use case that it seemed like 1 or 2 years ago that it was going to be like a huge change and you think that it's going to be very quiet. Yeah, so I I mean, my gut feeling is that in the coming year we'll see more developments on the digital money space.

So well, stablecoins are already there. We'll see more banks, more institutions using stablecoin payment rails, but also more institutions getting into the tokenized deposits world as as an opposite. I mean, to protect their their balance. Um there's some projects that are trying to tackle that interoperability and standards. I think that we're going to see also um a lot of progress from there because there's a lot of pressure that we need that those standards and that interoperability to develop tokenized deposits.

If not tokenized deposits are only useful um within the same institution with within the same banks of the same group. So I think that there's going to be a a lot of at least pressure to move um faster in that space. A risk um the execution risk because banks are traditionally very very slow. And we are even slower if we get together with others. So So I think that's a that's a risk in that in that space.

All right, I have two predictions. Uh the first is if the war ends, markets will go up. So I think that's one. And then I would say the second prediction is this, along the lines of what Peter was saying. We have about 8 billion people in the world.

1 billion of them use digital assets and crypto almost as a luxury, as an option. I mean, I live in Switzerland. I don't have to use stablecoins. But the beauty of DLT-based investments and products are the 7 billion other people in the world that don't have access to investments or inflation-resistant currency, now they will have access to it and that's only going to increase. So, more capital will flow into this space.

I think that the the types of offerings that we'll see in the market this year, I think you'll see a lot of the you know, G-SIB banks, the the biggest banks in the world actually offer custody services and you know, follow um you know, follow the likes of Santander and others that have been sort of investing in the space for a long time and you'll see new market entrants of uh big financial institutions uh in which will change the market dynamics and change the institutional adoption. I think that you know, there has to be you know, a greater uh degree of flexibility in terms of yield and how we, you know, give yield out to different market participants and I think there's a big debate in America, but we'll see a lot more flexibility in global regimes I think than uh what we'll see in America. Um and look, I think that uh AI is going to create a lot of havoc and a lot of opportunity for the industry. I think that it already creates a lot of challenges from a you know, fishing and hacking perspective that we at Chainalysis are very much uh you know, dealing with on a daily basis. Uh but it also creates a huge amount of opportunity in terms of stablecoins and the future of payments.

I think the um US dollar digital money market is fairly saturated, but I see every other currency market as fairly wide open and the one thing that I hear the tradfiest of tradfi people talking about is the tokenized FX market. And so, I think that's the next big trend of the years. People coalescing around uh central models for FX trading on chain. We are having different panels here about non-USD uh based stablecoins. Are you seeing that as a trend?

For example, you think that USD is going to be totally leading this space in the stable coins as it is currently. I I see that as a massive trend. Um just even in terms of our business, we were dealing mostly with US stable coins, but today I'd say out of all the client conversations happening, 75% of them are non-US dollar stable coins. Perfect. So, thank you again for being here.

Let's take like the conclusion of Andrew if the world ends that it seems we are pretty close. The markets will go up. We did We really need that in the crypto space. So, thank to you and thanks everyone. Let's enjoy the rest of the balance for the day.

Thank you very much.