Why institutions prefer Solana over newer rivals for stablecoin adoption – Solstice CEO

The cryptocurrency industry has entered a new era spearheaded by stablecoins, real-world asset (RWA) tokenization, decentralized finance (DeFi), and Artificial Intelligence (AI) applications. In an exclusive interview with FXStreet, Solstice CEO Ben Nadareski says that while stablecoins have achieved notable adoption as settlement tools, the next chapter of growth will depend on whether the industry can exemplify practical use cases for both retail and institutional traders.

“What's really going to break through retail adoption is showing that stablecoins actually have a use case in the market,” Nadareski said.

Stablecoin liquidity, trust and the yield gap

Institutional investors are increasingly looking for more than a simple digital store of value, and Solana (SOL) has firmly established itself as the leading protocol for rigorous stress testing.

Nadareski, whose Solstice protocol has secured over $500 million in funding, states that this migration is propelled by the market’s growing appetite for transparency and capital efficiency, areas where legacy chains and centralized issuers have persistently fallen behind.

His comments come as major jurisdictions, including the United States (US) and the European region, accelerate efforts toward clearer regulatory frameworks for stablecoins and tokenized assets, which are among the fastest-growing sectors in the crypto industry.

However, Nadareski emphasized that investors considering stablecoins should evaluate them based on proof of reserves, urging organizations to ensure transparent collateral verification and have it audited by independent third parties. Other key criteria include a sustainable business model, fundamental stablecoin utility and deep liquidity across trading venues as well as redemption channels.

“The number one proof point for any major stablecoin provider is to show where the collateral assets sit,” the CEO stated.

The Solstice CEO argued that stablecoins are evolving through distinct phases, starting with tokenized money, tokenized RWAs and tokenized yield. Nadareski believes that overall, the evolution could challenge the dominance of traditional stablecoins such as Tether (USDT) and Circle’s USDC, whose business models largely depend on collecting interest income from reserves while offering users limited direct participation in those returns. Investors are likely to continue seeking access to products with underlying yields rather than holding US Dollar (USD)-pegged tokens as digital cash.

“This needs to change, or else we're going to continue to see fragmented liquidity and you're going to see countries that do not operate on the US Dollar see massive retail flight into US Dollar-backed stablecoins and then flock somewhere else to get their yield,” Nadareski added.

Why are institutions flocking into Solana?

Solana’s appeal among institutions was a major standout in the interview. Although Ethereum (ETH) remains the dominant blockchain for many institutional applications, the Solstice chief said that newer capital allocation and innovation are increasingly flowing toward Solana.

Lower transaction costs, faster processing speeds, high developer activity, greater application composability and expanding DeFi infrastructure are among the factors driving interest in Solana.

Nadareski further argued that the speculative activity often criticized by traditional investors, including the meme coin boom, contributed to Solana’s ability to process massive transaction volumes under real-world conditions.

“Where innovation is, is where you're going to see the growth,” Nadareski stated.

Institutions will continue to trickle to platforms that offer practical solutions such as lending, borrowing, RWAs and yield generation while moving away from platforms that are inherently speculative.

Looking beyond the current market cycle, Nadareski believes that DeFi may become the crypto industry’s growth narrative. Although Bitcoin (BTC) is perceived as digital gold and the flagship asset, meaningful innovation is taking place in the DeFi ecosystem.

“The DeFi summer narrative is now coming back into motion,” he said.

Asked where he would avoid deploying capital today, Nadareski insisted on transparency over any specific blockchain or token. He added that investors should be concerned with projects with weak liquidity, limited utility, concentrated token ownership, or inactive ecosystem development.