Blockchain Is Fast Enough For Institutional Adoption. But What Else Does It Need?

If there’s one thing that blockchain has gotten better at over the years, it’s speed. Scalability is a major priority for just about every blockchain network today and significant progress has been made, resulting in dramatic increases in throughput. One of the best examples of this is Ethereum, which was once painfully slow at just a handful of transactions per second. But thanks to its transition to Proof-of-Stake and the emergence of Layer-2 scaling networks, it can now process thousands of transactions in seconds.

The impressive strides made in blockchain scalability were illustrated in a recent report by a16z crypto, which found that the throughput has increased by more than 100-times in the last five years. The 2025 State of Crypto report looked at the average processing speed of dozens of major blockchain networks, and found that it’s now capable of processing an astonishing 3,400 TPS, up from just 340 TPS five years ago.

Those numbers suggest blockchain is now much faster than many of the world’s most reliable financial systems. For instance, the payments processor Strip was only able to process around 2,300 TPS during Black Friday and Cyber Monday, while the Nasdaq stock exchange is capable of approximately 2,400 TPS.

No More Need For Speed

Of course, decentralized networks still have room for improvement and cannot yet match the blazing-fast processing speeds of credit card networks like VISA, which can facilitate more than 24,000 TPS. But it doesn’t need to attain such speeds to support most institutional requirements, said COTI CEO, Shahaf Bar Geffen.

According to Geffen, blockchain is absolutely institutional-ready in terms of its ability to process transactions rapidly enough. “While there are always further improvements that can be made in terms of scalability, speed and cost are no longer deterrents,” he said. “If you’re building a dApp that’s reliant on Visa-level TPS, there are numerous chains capable of meeting this benchmark.”

It’s hard to argue with such claims. While a16z crypto’s report says blockchains average 3,400 TPS, there are several chains that can process many more transactions than this. Solana, for example, utilizes a novel combination of unique Proof of History and Proof of Stake mechanisms to achieve an eye-watering 65,000 TPS, putting even VISA’s network to shame.

The report also shone a light on the cost-effectiveness of blockchain transactions, and once again it put many of its competitors to shame, with most networks showing far greater affordability than traditional payment rails. Indeed, some blockchains – such as Nano and IOTA – don’t charge any fees at all, while others such as Solana and Tron have long supported sub-cent transaction costs. Even Ethereum, once notorious for its congestion-driven $100+ fees, has achieved minimal gas costs through various L2 scaling solutions, such as Abritrum and Polygon.

Geffen said the widespread availability of sub-cent transactions on L2 networks has been an instrumental factor in driving institutional adoption of blockchain, and is one of the main reasons why stablecoin transaction volumes hit over $46 trillion in the last year. “For institutions, the ideal cost threshold lies around $0.01 per transaction,” Geffen said. “Below that, on-chain economics crushes the fees levied by traditional rails, especially for cross-border or high-frequency settlements.”

So with its rapid throughput and industry-beating cost-effectiveness, does that mean blockchain is now primed for mainstream adoption among the world’s financial powerhouses? Not yet, Geffen says, for there’s still one more problem to solve. That would be blockchain’s transparency, which is often held up as one of its major benefits, but causes major headaches for institutional users.

“It will be the interplay with privacy that truly scales blockchain adoption,” Geffen said. “It’s not there yet. When an institution wires $1 billion to an overseas subsidiary through traditional banking rails, nobody apart from the counterparties and the banks involved will know about it. But if you do that on-chain, everybody sees.”

Why Transparency Is A Problem

Transaction privacy is essential for institutions because their financial dealings are among their most important secrets, and they don’t want their transactions to be made public. Without privacy, an organization’s competitors can analyze its business strategies and come up with a more effective one in order to steal its customers, or replicate its trading patterns to match its profits.

In addition, a company’s financial dealings might reveal other secrets, such as where it sources its essential components from, its inventory levels and its relationships with partners. The public disclosure of transaction information may also violate non-disclosure agreements and compliance requirements.

Then there are security reasons. Any wallet that’s regularly sending and receiving millions of dollars’ worth of funds is going to attract attention and find itself a target for repeated hacking and phishing attempts, which increases the risk that money could be stolen. Businesses may also be subject to regulations such as Europe’s GDPR, which requires certain data to be anonymized and user consent for some kinds of information to be shared.

“Traditional financial institutions and large investors often have strict requirements for client confidentiality,” Geffen said. “The lack of privacy in RWA tokenization makes it difficult for these institutions to participate without potentially violating client confidentiality agreements or regulatory requirements. This privacy concern significantly deters institutional participation in the RWA tokenization market.”

Not every blockchain is as transparent as Bitcoin and Ethereum, however. In fact, privacy coins such as Monero and ZCash have been around for years, and have proven time and again that they are essentially immune to all kinds of surveillance techniques.

Transactions on these blockchains are truly untraceable, Geffen said. However, these blockchains are still unsuitable for institutions, because they lack the kind of nuance that’s required for essential compliance purposes. “The first wave of privacy protocols were great at concealing everything, rendering all transactions off-limits to prying eyes,” he said. “The second wave of privacy protocols aren’t just more granular in terms of the privacy controls they enable, but they’re much more scalable, allowing on-chain transactions to be masked without discernibly increasing costs or slowing settlement.”

Geffen was referring to a new breed of blockchains that implement “programmable privacy” controls that support what’s known as “selective disclosure”, which is where users can grant permission to select users to view their transaction history, while ensuring that nobody else can see what they’re doing. This kind of opt-in privacy is urgently needed by enterprises if they’re going to adopt blockchain-based payment rails and maintain compliance in the jurisdictions they operate in.

“At COTI, we’ve been supporting this Privacy 2.0 movement by allowing institutions to settle privately while ensuring that regulators can still look in where needed,” Geffen said. “This capability will accelerate mainstream settlement, allowing blockchain rails to become the preferred conduit for institutions moving trillions of dollars.”

Privacy Is The Final Battle

The dramatic increase in blockchain transaction throughput suggests that the industry’s “scaling war” may be coming to an end, because most networks are already fast enough for the vast majority of users. There’s not much point in trying to make blockchains go even faster if no-one is really going to benefit, after all.

As such, the real battle now comes down to privacy, which still leaves a lot to be desired on most blockchains. “Fortunately, the tools to achieve this are now readily available, they’re just not widely integrated,” Geffen said. “Once privacy can be accessed across every dApp, protocol and network at the click of a button, the stream of institutional adoption will turn into a torrent.”