In the debut episode of “On the Record”, Coinbase Institutional’s John D’Agostino sat down with 3iQ CEO Pascal St. Jean to discuss how the digital asset landscape is rapidly evolving. Their conversation explored the regulatory shifts unlocking institutional participation, the growing convergence between traditional and digital finance, and why tokenization may be the defining financial innovation of the next decade.
The Global Regulatory Shift: “It’s Game On”
Over the past 6–18 months, a dramatic change in the regulatory environment—particularly in the U.S.—has reignited global institutional interest in crypto.
After the turbulence surrounding FTX, many regulators and institutions hit pause. But with improved clarity and leadership changes, the tide has turned.
“Everyone was building under the radar, waiting for the U.S. to take a stance,” Pascal St. Jean explained. “Once that shift happened, all those teams became internal kingmakers— and globally, everything exploded.”
Reframing the Conversation for Institutions
While regulated products make digital assets easier for institutions to digest, many investors remain cautious. Pascal explained that the hesitation isn’t about regulation or belief in crypto—it’s about portfolio construction and investment committee decisions. “We’re not doing ourselves a great service as an industry at just blanketing everything as crypto,” he said.
Just as ETFs provide access to different types of assets—like equities or fixed income—crypto products vary widely in structure and purpose. Stablecoins, for example, are often lumped into the crypto market cap, but in reality, they function more like tokenized treasury assets. By breaking down digital assets into categories like Bitcoin, stablecoins, and layer-one infrastructure, institutions can better understand their distinct use cases and investment roles.
Once investors grasp these distinctions, the conversation shifts to portfolio construction and risk management, enabling investment committees to evaluate assets for hedging, infrastructure exposure, or other objectives—and allocate capital confidently.
Lessons from Traditional Finance: The Power of Convergence
Pascal believes the future of finance is not about replacement but convergence—where legacy systems and blockchain technology evolve together.
He drew parallels to how telecom companies adapted to the internet era. Just as the internet allowed legacy telcos to reinvent themselves, digital assets and blockchain technologies can complement traditional systems rather than operate in parallel. The same applies to finance: crypto innovators must understand the people and processes within institutions.
“If you don’t understand everyone’s role—the CFO looking for returns, the compliance officer focused on risk, the IT person concerned with integration—you’re just selling a narrative,” Pascal said. Success depends on “reading the room,” respecting traditional processes, and communicating in familiar terms.
Working with Sovereign Wealth Funds: Transparency Is Everything
A highlight of the discussion was 3iQ’s recent partnership with Further. Pascal opened the curtain on what it takes to build trust and relationships at this level. The process involved understanding local expectations, aligning visions, and demonstrating technical and institutional capabilities—ultimately creating a financially committed, strategic partnership, a rarity in global crypto finance.
Partnering with sovereign wealth funds also demands transparency and responsiveness.
“For us, it's all about communication and transparency, and that's something that we've always had as part of our DNA,” Pascal noted. “Being able to speak their language and to commit to having those harder conversations if they arise.”
“We have built 3iQ to be a partner of choice, and that means that customer service and partnership management are critical to us,” he added.
The Future of Tokenization: Coexistence and Convergence
In Pascal’s view, tokenization represents the ultimate use case for blockchain technology. It gives real value to the infrastructure being built around layer ones, decentralized exchanges, and other digital asset frameworks, linking it to products like ETFs.
“Whether you believe it or not, this is where a lot of institutions are coming in,” St. Jean said. “They’re seeing stablecoins and the tokenization use case, and they’re seeing adoption.”
He emphasizes that tokenization won’t immediately replace existing systems. Instead, there will be a period of coexistence—and likely convergence—where regulatory frameworks, fund structures, and administrators enable tokenized versions of diversified ETFs to be distributed globally.
“So all of a sudden, the ETF becomes the mechanism to pool the fund, and your tokenization wrapper provides global distribution,” Pascal explained.
Conclusion
The interview between John D’Agostino and Pascal St. Jean painted a picture of a maturing digital asset industry—one that’s not just surviving cycles but learning, adapting, and integrating into the global financial system.