Purpose-Built Governance of On-Chain Finance: Developing a Framework to Become Credible Stakeholders

On-chain finance is forcing a fundamental shift in how financial institutions exercise control. Markets that operate 24/7, settle instantly, and execute through code eliminate the time buffers, reversibility, and layered approvals that traditional governance depends on. For TradFi leaders, the risk is no longer whether to adopt on-chain technology, but whether their institutions can remain accountable when decisions are made in real time by smart contracts and AI rather than committees and manual controls.

Governance is the single biggest challenge for TradFi leaders entering on-chain finance. Without a purpose-built governance framework that embeds risk, compliance, and escalation directly into execution, TradFi will either be locked out of meaningful participation—or exposed to failures they cannot explain, stop or defend to regulators. In on-chain finance, governance is not a back-office function; it is the prerequisite for relevance, trust, and scale.

If you can’t govern on-chain finance in real time, you can’t scale it safely—and regulators, clients, and counterparties will not trust you. The institutions that become key stakeholders in on-chain finance will be the ones that redesign governance for real-time markets; embed risk, compliance, and AI into execution, not oversight; assign clear ownership for on-chain activity at the executive level; and treat control as a design principle, not a post-launch requirement.

This working group will focus on redesigning decision-making, risk ownership and accountability, and control models so institutions can participate at scale in on-chain finance. Discussion points include:

• Why governance—not technology—is the primary constraint on TradFi participation in on-chain finance.
• How 24/7, irreversible, code-driven markets break traditional approval, oversight, and control models.
• Where existing governance, risk, and compliance frameworks fail in on-chain environments.
• Defining accountability when decisions are executed by smart contracts and AI.
• Distinguishing which decisions must remain human and which must be automated.
• Embedding risk, compliance, and controls directly into execution rather than post-trade oversight.
• Designing escalation, kill-switch, and override mechanisms that work in real time.
• Aligning governance models with regulatory expectations for digital assets and on-chain activity.
• Moving from defensive participation to stakeholder-level leadership in on-chain market infrastructure.
• What TradFi leaders must decide in the next 6–12 months to preserve strategic relevance.
• Governance capabilities that differentiate market leaders from followers in tokenized and on-chain markets.