Custody, oracles and identity: technical fixes exist, but trust and governance remain central

Panelists at a Federal Reserve forum described concrete technical tools—multi‑signature and threshold signing, multi‑node oracle networks, and proof‑of‑reserves—as effective mitigations for many custody and data‑integrity risks, but they said governance, identity and regulatory fit remain deciding factors for broader bank adoption.

Michael Shalov, CEO of Fireblocks, described how custodians and wallet providers shift the safekeeping function from physical vaults to key management and distributed signing. “One of the things that Fireblocks and a few other folks have built over the last couple of years is this concept of multi‑signature or threshold signatures,” he said, noting these approaches have reduced high‑profile thefts.

In a question from a congressional office about whether Chainlink’s oracle network is a trusted third party, Sergei explained the Oracle system is composed of multiple independent nodes that can be configured for public or private uses and that customers (including central banks) can select node operators and policies to meet compliance needs. “You can configure an Oracle network to meet your requirements for compliance, location of the nodes, and these different requirements,” he said.

Panelists also discussed reversibility: Jennifer Barker (BNY) said that while on‑chain states are final, banking rails include revocability and the industry must design off‑chain processes to preserve consumer protections. Jackie Reses emphasized institutional responsibility for code and modern identity systems as the basis for new trust anchors.

The panel closed by urging practical education—bringing operations, compliance and executives into hands‑on experience with wallets and integration pilots—to lower organizational barriers to secure DeFi engagement.