University of Zurich’s Claudio Tessone says future of crypto depends on economic design, education, integration
The blockchain industry, once driven by speculative manias and technological zeal, is entering a more sober phase. From Switzerland’s Crypto Valley to Seoul’s policy committees, regulators and developers are converging on one conclusion: Blockchain’s future will depend less on code than on the systems of trust, incentives and education behind it.
“Blockchain systems are socioeconomic in nature,” said Claudio J. Tessone, professor of blockchain and distributed ledger technologies at the University of Zurich, during a recent interview with The Korea Herald in Seoul. “Designing them is not just about coding protocols — it’s about aligning the incentives of everyone involved.”
Tessone, who leads the university’s Blockchain Center and advises networks such as Cardano and Polkadot, argues that the industry’s deepest flaw is economic, not technical. “We still don’t know how to design proper incentives,” he said. “That’s why concentration of wealth and power keeps re-emerging, even in systems meant to decentralize it.”
After more than a decade of experimentation, Tessone says the industry must face a hard truth: decentralization has largely failed. “The most-used blockchains are centralized by construction, and users tolerate it — just as they tolerate inequality in traditional finance,” he said.
The problem, he argues, isn’t the technology but its economic design. “Blockchain can decentralize trust, but most systems have poorly designed incentives, which lead to power concentration.”
He likens blockchain governance to managing a small economy. “Designers should see blockchains as socioeconomic systems and adapt rules to how people use them — like societies do, enabling healthier evolution.”
One path forward, Tessone said, lies in tools that bridge digital and real economies. Stablecoins, for instance, offer a pragmatic link between blockchain and finance. “I’m from Argentina, a country plagued by inflation for decades,” he said. “For many people, saving in foreign currencies and accessing them is crucial to protect savings. Blockchains enable this and allow instant remittances.”
While stablecoins can boost efficiency, he warned that widespread use could weaken fragile currencies. “If everyone shifts to dollars or euros, some countries may lose monetary autonomy.”
For Korea, which is exploring a won-based stablecoin, he suggested prioritizing payments and circulation over savings. “It doesn’t need massive supply — just constant movement.”
For Tessone, blockchain’s next stage isn’t about chasing price cycles but building systems that last. “Full decentralization may not be achievable. And that’s not necessarily bad. Some structure improves performance,” he said. “We need smart integration of regulation and innovation to make them work.”
Yet he believes rules alone aren’t enough. Blockchains enable far more sophisticated financial products, Tessone warned. This includes flash borrowing and instant repayment via code, large leveraged positions in automated markets with near-zero lender risk, and rapid, deterministic execution combining assets and rewards.
“Investing in ‘next blockchains’ with untested, poorly understood consensus claims has fueled bubbles. Without understanding, blockchain becomes a black box — like a slot machine,” he said. “Financial education is essential to prevent people from falling for fraudulent schemes.”
While building such educational foundations is urgent for all countries, Tessone said the need is even greater in emerging economies, where blockchain lowers entry barriers but also heightens exposure to risk. Promoting international education and understanding, he noted, has therefore become a core mission for him and the University of Zurich’s Blockchain Center.
“That’s why our center maintains collaborations with multiple protocols and has built capacity to study blockchains from an international perspective,” he said. “Understanding how design choices shape long-term outcomes is fundamental for the healthy growth of the ecosystem.”
At Zurich, Tessone leads a network of 25 professors spanning law, finance, social sciences, computer science and philosophy, with the center dedicated to long-term collaborations with networks such as Cardano and Polkadot for critical analysis and research.
For Korea, Tessone sees both caution and promise. The country is “highly digitalized” yet lags its potential due to harsh policy reactions, scams and the lingering shadow of the Terra-Luna collapse.
“The infrastructure and know-how exist,” he said. “What’s missing is a clear link between public blockchains and Korea’s strong IoT and electronics industries.”
Regulators are now working to rebuild credibility through the Digital Asset Basic Act, a comprehensive framework to define legal boundaries and investor protections. Korea has also debated introducing a Bitcoin spot ETF, though progress has been slower than in the US, where regulators recently approved altcoin-based spot ETFs.
Tessone believes Korea’s real opportunity lies in combining public blockchain networks with physical technologies — autonomous devices, smart sensors and digital payments — areas where the country already leads.
“Private-chain solutions add little value,” he said. “Public blockchains are where true transparency and innovation emerge.”
