Definition ∞ Institutional DeFi represents the application of decentralized finance principles and technologies by traditional financial institutions. It involves large entities engaging with DeFi protocols for services like lending, borrowing, and trading, often with tailored solutions for regulatory compliance. This integration aims to leverage the efficiency and transparency of DeFi within established financial frameworks.
Context ∞ The emergence of institutional DeFi is a significant trend, with news outlets reporting on major banks and asset managers exploring or actively participating in DeFi markets. Current debates focus on the regulatory clarity required for broader institutional adoption and the development of compliant infrastructure. The increasing involvement of these entities signals a potential maturation and wider acceptance of decentralized financial systems.
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