Unlocking Institutional Adoption: Fintech Blockchains Confront the Performance Bottleneck

The cryptocurrency landscape stands at a pivotal moment. Established financial players are increasingly exploring digital assets, signaling a new wave of institutional adoption. However, a significant challenge remains: the inherent limitations of current blockchain technology. Industry expert Annabelle Huang identifies this critical hurdle as the “blockchain bottleneck.” This performance issue directly impacts the ability of Wall Street and major fintechs to fully integrate digital assets into their core operations. Despite this, a fascinating trend emerges as leading fintech companies actively build their own blockchain infrastructure. This development underscores a deep commitment to the digital asset space, moving beyond mere exposure to direct infrastructure investment. Yet, these ambitious projects must still overcome the fundamental speed and throughput issues that have long plagued the crypto world.

The Emergence of Fintech Blockchains and Institutional Commitment

A new era of institutional adoption is dawning, spearheaded by prominent fintech firms. These companies are not just offering crypto trading; they are building foundational blockchain infrastructure. For instance, the financial services app Robinhood recently unveiled plans for its own layer-2 blockchain. This new chain aims to support tokenized stocks and various real-world assets. Similarly, Stripe, a major payment processor, announced Tempo, a payments-focused blockchain developed with Paradigm. This move signifies a deeper integration of digital assets into traditional financial systems.

Annabelle Huang, co-founder of Altius Labs, observes this trend with keen insight. “That’s going to be the beginning of many others to come,” Huang stated in an interview. She further highlighted the global scope of this shift. “The fintechs in Asia, Latin America, and other emerging markets that have looked into this for many years now are also getting ready to make more moves.” This indicates a widespread readiness among fintechs to leverage blockchain technology for their specific use cases. The creation of these bespoke fintech blockchains marks a significant evolution. It represents a commitment to embedding digital assets directly into their operational core, rather than treating them as an auxiliary service. This strategic pivot promises to reshape how institutions interact with the decentralized economy.

Annabelle Huang on the Persistent Blockchain Bottleneck

Despite the enthusiasm surrounding new fintech blockchains, a critical hurdle persists. Annabelle Huang, drawing from her extensive experience in crypto and traditional finance, pinpoints the industry’s “execution bottleneck.” This issue stems from the vast performance gap between traditional financial infrastructure and current blockchain networks. Wall Street firms routinely execute trades in microseconds. By contrast, even advanced blockchains process transactions in seconds or, at best, milliseconds. This fundamental difference in speed creates a significant barrier for institutions considering large-scale adoption of blockchain technology. Huang argues that resolving this bottleneck is paramount. Without substantial improvements in transaction throughput and latency, fintech-built chains cannot reliably support the immense volume and speed demanded by institutional capital.

To illustrate this disparity, consider Nasdaq’s performance during the annual Russell index reconstitution on June 27, 2025. The exchange’s closing auction matched an astounding 2.5 billion shares in just 0.871 seconds. Nasdaq’s INET system boasts the capacity to handle over 1 million order messages per second, with sub-40-microsecond latency. This level of efficiency represents the benchmark for traditional finance. Meanwhile, current blockchain capabilities fall significantly short:

• Ethereum: Processes approximately 15 transactions per second, with block times around 12 seconds.
• Solana: One of the fastest major networks, achieving roughly 400-millisecond block times and several thousand transactions per second in practice.

Even Solana’s impressive 95 million daily transactions on July 22, 2025, do not meet Wall Street’s expected benchmarks. These figures highlight the severe blockchain bottleneck that must be addressed before institutions can fully migrate significant trading activity onto decentralized ledgers. This performance gap remains a core challenge for the broader crypto ecosystem.

Altius Labs’ Innovative Approach to Crypto Scaling

Recognizing the urgent need to overcome the blockchain bottleneck, Annabelle Huang has dedicated her efforts to finding a solution. Her venture, Altius Labs, is developing a modular execution layer. This innovative technology aims to plug directly into existing blockchains. The goal is to significantly boost throughput without requiring projects to undertake a complete architectural overhaul. Huang explains their vision: “Our goal is to bring performance to any blockchain in a plug-and-play way.” This approach allows chains to upgrade their block execution time and overall throughput seamlessly. Consequently, they avoid the complex and often disruptive process of redesigning their entire underlying architecture.

Altius Labs’ strategy introduces modularity deeper into the execution layer of the blockchain stack. This differs from conventional scaling solutions like spinning up sidechains or new layer-2 networks, which can sometimes lead to fragmentation and complex user experiences. By focusing on the execution engine itself, Huang believes Web3 can bridge the performance gap with Web2-level systems. Crucially, this can be achieved while preserving the distributed and decentralized nature of blockchains. This method represents a novel pathway for significant crypto scaling, promising to enhance efficiency across various networks. Furthermore, it offers a pragmatic solution for developers seeking to improve their blockchain’s performance without sacrificing existing infrastructure investments.

Indirect Pathways: ETFs, Treasuries, and Institutional Exposure

While direct integration via fintech blockchains is the future, institutions have not waited for technical upgrades to gain exposure to digital assets. Many large investors have found entry points through indirect means. Exchange-Traded Funds (ETFs) for Bitcoin (BTC) and Ether (ETH) have become popular, offering regulated and accessible avenues for exposure. Additionally, companies like Strategy (formerly MicroStrategy) have effectively transformed themselves into leveraged proxies for Bitcoin. These corporate treasury strategies allow traditional investors to gain exposure to BTC through equity markets.

However, not all such blueprints have proven equally successful. Throughout 2025, some struggling firms attempted to leverage the “Bitcoin treasury” narrative. They hoped to spark investor enthusiasm, with some briefly seeing stock price surges followed by retracements. Huang cautions against these pivots, especially for retail investors. She notes that corporate Bitcoin strategies vary significantly in their structure and risk profile. She compared these stock spikes to token launches: an initial bid-up followed by a return to a “fair value.” Despite these risks, demand for proxies like ETFs and treasury strategies persists. Huang points out the enduring appeal of MicroStrategy, even after Bitcoin ETFs became available. “First, because Michael Saylor has been accumulating for a longer period, their average cost basis is lower. Second, they’ve done several rounds of fundraising through convertible bonds, which introduces leverage. That makes MicroStrategy effectively a slightly levered play on Bitcoin at a lower cost basis,” she explained. For altcoin exposure, investors often turn to debt strategies, as ETF options remain limited beyond Bitcoin and Ether.

The Future Landscape: Fintech Blockchains and Advanced Institutional Adoption

The commitment of fintechs like Robinhood and Stripe signals the next crucial stage of institutional adoption. This evolution moves beyond merely adding crypto tickers to trading apps. Instead, these firms are investing in proprietary blockchains, embedding digital assets into their foundational infrastructure. This shift is not occurring in isolation; the surrounding infrastructure is also adapting. Over-the-counter (OTC) desks, historically discreet on-ramps for hedge funds, are now repositioning themselves. They are becoming regulated liquidity providers, offering the compliance, settlement, and reporting standards that institutional clients demand. This development brings crypto markets closer to established Wall Street norms.

Annabelle Huang foresees an accelerating trend. “What we’re seeing now — and I expect even more going forward — is a trend of institutions adopting stablecoins or even building their own blockchains for specific use cases,” she noted. These are conversations she engaged in with institutional players years ago during her time at Amber Group. Now, she observes, “they’re finally ready to act.” This readiness indicates a maturing ecosystem. Institutions are increasingly comfortable with blockchain technology and are actively seeking tailored solutions. Consequently, the focus on solving the blockchain bottleneck through innovations like Altius Labs’ modular execution layer becomes even more critical. Such advancements will pave the way for a more seamless and efficient integration of digital assets into the global financial system, facilitating robust crypto scaling for the future.