Embracing institutions today will keep defi’s tomorrow on track
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Disclosure: The views and opinions expressed here belong solely to the author and do not represent the views and opinions of crypto.news’ editorial. Now that crypto’s volatile streak has calmed down considerably, many projects are looking to bring traditional finance, or TradFi, institutions into the blockchain fold. From banks to asset managers and investment firms, the crypto industry’s message to them has become this: The door is wide open, so step inside. But why? If there’s one thing that TradFi institutions are not particularly famous for, it’s embracing new technologies. Fintech companies that deal with fiat currency are typically more nimble here if PayPal jamming themselves into the stablecoin sphere is anything to go by. If you look at big-league banks and storied financial institutions, however, most are notoriously slow at matching adoption to the pace of technological innovation. With this in mind, crypto projects—defi ones in particular—are right to question the desire to bend backward for TradFi acceptance. Especially when the defi sector, and the crypto industry as a whole, still has so many internal problems to sort out. Is it worth the effort? While certain aspects of decentralized infrastructure might not be ready for widespread TradFi integration, progress in the tech industry is hardly linear. That being said, you can’t blame big banks or asset management firms for being slow to start when embracing tech innovation. It’s a significant investment, and they want to ensure it’s a sure thing. But the harsh “change or die” reality characterizes tech development, and the financial realm is no exception to this as more alternatives to traditional finance emerge. And as tech innovation continues to accelerate, adapting to new technology is not a question of ‘if’ but ‘when’ at this point. Although rapid change is expected if companies want to remain competitive,…
Filed under: News - @ December 3, 2023 12:20 pm