Why Banks Can't Move Beyond Blockchain Pilots, According to Matter Labs | Markets Outlook

Alex Glukowski said the main obstacle to banks moving blockchain projects from pilots into production is not the tokenization itself but the operational work required to fit a system into a regulated organization. Institutions need identity integration, permissions, monitoring, compliance controls, and connections to existing systems. Those requirements make it difficult to expand an experiment across an organization, even when the underlying blockchain works.

Glukowski said Matter Labs has worked with institutions for more than two years and created Previdium Commander as a separate service for institutional control and operations. Banks can connect it to their existing systems and use it to issue and operate digital asset services under their own rules. The pitch is that institutions can address administration and governance without having to replace their existing infrastructure as a first step.

Banks have tried internal ledgers, including systems based on Hyperledger Besu, but Glukowski said these efforts have not achieved mainstream adoption. A ledger that works within an institution faces a harder test when it must be opened to external participants, because that requires stronger controls. In Cary Network’s tokenized-deposit work, he said, tokenization is a relatively small part of the project; administration, permissions, policies, and core-system integration account for much of the effort. He said 30 banks are moving toward production “very soon,” though the synopsis does not specify a timeline or what production entails for each institution.

Commander can work with existing private and public chains, including public permissionless chains, rather than requiring an immediate migration to a new ledger. Institutions can later upgrade to a high-performance Previdium ledger secured by zero-knowledge proofs and eventually connect with other institutions. That staged approach is intended to let banks begin with their current systems while retaining the option to move toward a shared digital-asset infrastructure.

Privacy is another design constraint. Glukowski said some existing approaches can leave regulators, auditors, and internal security teams without sufficient oversight, while others require institutions to trust external third parties. He argued that zero-knowledge proofs can allow privacy while institutions retain control of their data and decide who can access, share, or transact. The trade-off he described is not simply between public visibility and secrecy: institutions need to protect information while preserving the ability to oversee activity and meet their own control requirements.

Glukowski said raw performance is not a major concern for most institutions, but some process hundreds of thousands or millions of transactions per second in aggregate and need capacity available for peak demand. If a blockchain reaches capacity and throttles transactions, he warned, the consequences could be serious, including cascading liquidations. He argued that blockchain systems have not yet provided the reserve capacity institutions require, and that high-performance engines combined with zero-knowledge proofs can support high throughput and low transaction costs.

Glukowski expects markets to upgrade to digital assets and institutions eventually to move core systems onto technology he described as more efficient and flexible. His stated goal is a globally interconnected digital-asset economy in which institutions can use digital assets with full control and flexibility and connect on their own terms. The adoption challenge, as he framed it, is therefore broader than proving a blockchain pilot works: institutions must be able to operate the system reliably, govern access, preserve oversight, and integrate it with the systems they already depend on.