Is DeFi Dead? Why The Crypto vs Wall Street Divide Is Disappearing

According to Maple Finance CEO Sid Powell, DeFi as a separate category is finished. But before you interpret this as bearish news, consider what he actually means: the distinction between DeFi and traditional finance will cease to exist because blockchain infrastructure will become the default plumbing for all capital market operations.

“In a couple of years, institutions won’t distinguish between DeFi and TradFi at all,” Powell explained in a recent analysis. “Eventually, all capital markets activity will take place onchain.” This isn’t the end of decentralized finance—it’s the end of treating it as something distinct from traditional markets.

From Separate Ecosystems to Unified Infrastructure: DeFi’s Next Chapter

Powell frames this evolution through a familiar lens: the internet revolution. Before e-commerce, consumers shopped through physical merchants. After the digital transformation, shopping still happens, but the majority now flows through platforms like Amazon and Alibaba. The mechanics changed, the infrastructure shifted, but the fundamental activity—commerce—never disappeared.

Blockchain technology will play an identical role in financial services. Transactions will still occur, capital will still move between parties, but the settlement layer will transition from legacy systems to public ledgers. Institutions won’t be choosing between “DeFi” and “TradFi”—they’ll simply be conducting operations on a blockchain-based infrastructure, likely without even realizing it.

This shift won’t happen overnight. A regulatory framework must be established. But when it does materialize, the primary participants will be the institutional powerhouses that currently dominate traditional finance: sovereign wealth funds, pension managers, insurers, and large asset managers—what Powell calls “the managerial class that controls the world’s financial markets.”

The Economics Driving Stablecoin Adoption: Why $50 Trillion Is Within Reach

Where does growth come from in this new ecosystem? Not from speculative DeFi tokens, but from tokenized private credit and real-world asset settlement.

Powell’s most aggressive forecast targets stablecoins as the accelerant for mainstream adoption. Following regulatory clarity around digital currencies, major financial players have moved quickly: PayPal launched PYUSD, Société Générale issued euro and dollar-pegged stablecoins through its crypto division, and Fiserv rolled out FIUSD for payment networks. Bank of America, Citi, and Wells Fargo have all signaled interest in issuing their own versions. Even Visa and Mastercard are building settlement infrastructure for stablecoin transactions, positioning themselves in a competitive race with tokenized deposits and digital money solutions.

Here’s the economic incentive that will drive adoption: small merchants and retailers currently operate on razor-thin margins while paying 2%-3% in fees to card networks. Stablecoins can dramatically reduce this friction, potentially returning several percentage points of revenue to their bottom line. That direct financial motivation will push small business adoption first, followed by neobanks and traditional banking institutions offering native stablecoin support.

The scale Powell envisions is staggering. He forecasts stablecoins could process $50 trillion in annual transaction volume by 2026—a figure that would eclipse traditional card networks. To put this in context, this represents a massive acceleration from current volumes and reflects his confidence in how quickly the infrastructure economics will drive behavioral change among merchants, businesses, and payment processors.

Powell even draws a parallel to insurance float economics, comparing stablecoin issuers to companies like Berkshire Hathaway. Users deposit dollars into stablecoin platforms. Issuers then park those funds into safe assets such as Treasury bills, earning yield on the float while paying no interest on their liabilities. Run this operation efficiently, and the spread between earned yield and cost of capital becomes a powerful compounding engine—exactly the model Berkshire Hathaway has leveraged for decades in insurance operations.

Market Validation: Real Numbers Behind DeFi’s Evolution

What happens to today’s DeFi market in this new regime? Powell estimates it could reach $1 trillion within the next couple of years. Currently, total DeFi market capitalization sits around $69 billion—leaving substantial runway for growth.

This expansion won’t be random. The DeFi growth trajectory is fundamentally tethered to two variables: the circulating supply of stablecoins and the volume of tokenized real-world assets. As both scale, total value locked in DeFi protocols should climb in tandem. Powell frames DeFi market cap growth as “a function of the market cap of stablecoins and tokenized assets”—a direct causal relationship rather than speculative expansion.

The space remains cyclical and macro-dependent, but it’s growing faster than traditional finance and will accelerate as institutional infrastructure becomes available. DeFi borrowing markets, protocol revenues, and yield opportunities all expand when there’s more stablecoin liquidity and more assets eligible for onchain financing.

Capital Markets Going Onchain: The Inevitable Infrastructure Shift

Beyond stablecoins, expect to see debt capital markets increasingly adopt crypto-native structures. BTC-backed mortgages, asset-backed securities tied to crypto loans, and crypto-card issuers whose receivables can be securitized and sold into capital markets will become commonplace. This represents an acceleration of the existing trend—traditional finance mechanics operating on blockchain infrastructure with improved efficiency and settlement speed.

Powell’s thesis ultimately positions this not as crypto versus traditional finance, but as the complete crypto-fication of traditional finance operations. The “death of DeFi” doesn’t blur the line between decentralized and centralized finance; it erases that distinction entirely. When blockchain infrastructure becomes invisible and assumed—the underlying plumbing rather than a novelty technology—the question of whether something is “DeFi” becomes meaningless.

The financial system won’t look radically different from a user perspective. But the machinery underneath will have undergone a fundamental transformation: all settlements flowing through blockchains, all capital markets activity coordinated through distributed ledgers, and institutions operating across this unified onchain infrastructure as though it were always there.