Digital Asset CEO Yuval Rooz: Market downturn exposes 'hollow' crypto token economics
In an exclusive interview, Yuval Rooz, cofounder and CEO of Digital Asset, explained how the recent cryptocurrency market downturn is revaluing tokens with weak fundamentals while driving institutional adoption toward networks offering genuine utility, robust privacy features, and cost certainty.
According to Yuval Rooz, the recent cryptocurrency market downturn is compelling the industry to undergo a fundamental reassessment that rewards blockchain networks built on genuine business models—where actual value accrues to token holders and end users instead of being extracted by intermediaries or driven purely by speculative trading activity.
As the co-founder and CEO of Digital Asset, the company behind the institutional-grade, privacy-focused Canton Network, Rooz shared with Cointelegraph in an exclusive conversation that he remains untroubled by current market conditions, noting that the volatility hasn't deterred his primary institutional client base from their blockchain adoption strategies.
When discussing examples of blockchain projects attracting investor interest amid the turbulence, he specifically highlighted Canton Network alongside the derivatives trading platform Hyperliquid.
Data from CoinGecko shows that Canton Network's native cryptocurrency experienced a 25% price increase over the previous month, while Hyperliquid (HYPE) climbed 28% during the same timeframe.
What people start to understand is that all of the crypto narratives have been empty shells.
Yuval Rooz
Cross-chain bridges, transaction costs and privacy-focused tokens
According to Rooz, the key distinguishing factors for institutional blockchain adoption are the underlying architecture and the fundamental design of the token economics. He explained that public blockchain networks predominantly depend on bridges as their primary method for establishing connectivity with other networks.
Bridges inherently are not interoperability.
Yuval Rooz
The mechanism by which bridges function involves transferring assets between different blockchain networks through a process of locking the original assets on their source chain and minting tokens of equivalent value on the receiving network. Because these assets remain secured in smart contracts, bridge protocols have become frequent targets for malicious actors and security exploits.
The increasing dependence on bridge infrastructure has additionally attracted attention from regulatory authorities, not solely due to security weaknesses but also because of their capacity to make transaction trails less transparent and harder to trace.
According to estimates published by blockchain security firm Elliptic, a minimum of $21.8 billion in cryptocurrency linked to illicit activities or classified as high-risk passed through decentralized trading platforms, cross-chain bridge protocols and token swap services throughout 2025.
Regulators increasingly perceive this type of infrastructure as presenting systemic risk to the broader financial system, especially when paired with privacy-enhancing technologies that reduce the ability to trace transaction flows. Regulatory bodies have also developed heightened concerns regarding what Rooz characterized as "anonymity coins."
According to Rooz, major institutional clients such as Depository Trust & Clearing Corporation and Euroclear require robust privacy protections, seamless interoperability that doesn't rely on bridge protocols, and predictable fee structures. He contended that general-purpose public blockchain networks are fundamentally unable to deliver all three of these requirements simultaneously.
Institutional financial products deployed on public blockchain networks
Notwithstanding Rooz's assertions about the limitations of public chains, numerous major asset management firms have already begun issuing tokenized financial products on Ethereum (ETH) and other general-purpose public blockchain platforms.
The USD Institutional Digital Liquidity Fund (BUIDL), BlackRock's inaugural tokenized fund offering, was deployed on Ethereum in 2024 and has subsequently expanded to include integration with multiple additional blockchain networks.
Similarly, Franklin Templeton has tokenized a money market fund invested in US government securities on the public Polygon and Stellar blockchain networks, with BENJI tokens serving as the representation of beneficial ownership interests in the underlying fund.
Financial institutions are also conducting experiments with public blockchain infrastructure while maintaining permissioned systems, approaching them as complementary rather than mutually exclusive options. JPMorgan deployed its JPM Coin payment system on Coinbase's Base network to serve institutional clients in November 2025, and subsequently announced intentions to introduce USD JPM Coin (JPMD) natively on the Canton Network during 2026.
They're bringing stablecoins to Canton and we're very excited about it.
Yuval Rooz
Rooz further noted that institutional clients have begun evaluating different stablecoins "kind of like collateral," conducting risk assessments to compare the relative security and stability of various options before making decisions about their preferred settlement mechanisms, whether that involves USDC (USDC), Tether's USDt (USDT), JPM Coin, or alternative bank-issued stablecoin products.