The crypto industry is entering a new phase where institutions no longer base adoption decisions solely on Bitcoin’s price. Instead, they are evaluating whether the underlying financial infrastructure can support long-term participation.
In an exclusive interview with Coinpedia, Joey Garcia, Chief Strategy, Policy, and Regulatory Affairs Officer at Xapo Bank, explained why the industry is now facing higher expectations around compliance, custody, and regulatory clarity.
According to Garcia, the market conversation has evolved significantly over the past few years.
“The conversation around digital assets is becoming more structured, but also more demanding,” he said.
He explained that institutions are no longer debating whether Bitcoin deserves a place in global finance. Instead, the focus has shifted toward whether the ecosystem can reliably support large-scale institutional participation over time.
Bitcoin Becoming Harder for Institutions to Ignore
Garcia pointed to growing crypto involvement from major Wall Street firms such as Goldman Sachs and Morgan Stanley. He said their participation shows that investors increasingly view Bitcoin as a legitimate strategic asset. “Bitcoin’s evolution into a credible strategic allocation is becoming increasingly difficult to ignore,” Garcia said.
He added that large institutions focus more on operational readiness, legal certainty, and reliable infrastructure than on speculative market narratives.
Why Custody and Compliance Are Critical
According to Garcia, institutional adoption cannot scale properly without banking-grade custody systems and strict compliance frameworks.
He stresses that open blockchain networks like Bitcoin operate very differently from traditional closed financial systems or simple Bitcoin investment products tied only to price exposure.
Because of this, he said risk management, settlement systems, and custody architecture must be specifically designed for decentralized networks instead of relying on legacy financial infrastructure.
CLARITY Act Could Shape Crypto’s Future
He further discussed the growing momentum behind the CLARITY Act after its recent advancement through the Senate Banking Committee.
“The recent advancement of the CLARITY Act is another sign that policymakers are moving from broad debate toward market structure,” Joey Garcia explained.
However, he warned that implementation details will be crucial. According to Garcia, the best regulations are proportionate and risk-based, focusing on intermediaries and financial activities instead of directly regulating blockchain technology itself.
“Overly prescriptive rules risk pushing activity outside regulated oversight rather than containing it,” he said.
Garcia concluded that long-term crypto adoption will ultimately depend on how effectively regulators balance innovation, operational practicality, and financial oversight while integrating traditional finance with open blockchain systems.