Why Traditional Finance Should Embrace Crypto
Now that crypto’s volatility has subsided, many projects are looking to bring traditional finance institutions into the blockchain world. Despite their reputation for being slow to adopt new technologies, the crypto industry is encouraging banks and investment firms to step inside and explore the possibilities. While there are internal issues within the crypto industry that need to be addressed, progress in technology is not linear.
The Reality of Tech Innovation
Traditional finance institutions have been hesitant to embrace tech innovation due to the significant investment involved. However, the reality is that change is inevitable, and more alternatives to traditional finance are emerging. JPMorgan has already launched an institutional defi offering, proving that there is potential for collaboration between traditional finance and defi.
Defi’s Role in Convincing Institutions
Defi projects need to address challenges and believe in their own potential. By focusing on merging defi and TradFi, long-term goals can be set for the industry as a whole. Smaller defi projects should also consider catering their offerings to institutions, even if they fear competition or failure. Building a product that solves specific problems in TradFi would be a significant milestone.
The Importance of a Clear Endgame
Without a clear endgame, the defi industry risks getting stuck in endless internal debates over minor improvements. Instead, institutional TradFi adoption provides a meaningful trajectory for projects to work towards, creating an appealing product ecosystem that solves real financial problems.
Hot Take: Traditional Finance and Defi Can Thrive Together
The crypto industry has opened its doors to traditional finance institutions, urging them to embrace blockchain technology. While there are challenges and internal issues within the crypto industry, progress in technology is not linear. Traditional finance institutions have been slow to adopt tech innovation due to the significant investment involved. However, with the rise of alternatives to traditional finance, embracing new technology is becoming inevitable. Defi projects need to believe in their own potential and work towards merging defi and TradFi. By focusing on collaboration, the industry can create an appealing product ecosystem that solves real financial problems.
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