Once, not too long ago, the idea of bridging the gap between TradFi and crypto was considered so unrealistic as to be fanciful, naive. After all, wasn’t crypto conceived as an antidote to the tired financial system with its rampant money-printing and expensive legacy systems?
How times change. The meteoric rise of mobile-first banks like Monzo and Revolut, coupled with the growing adoption of digital assets and DeFi protocols, has given rise to a financial world within a world, one characterized by open borders, low-cost transactions, and ease of use.
Today’s banking options are plentiful, with solutions that combine TradFi with Web3 on a major upward swing.
The Rise of Hybrid Financial Solutions
The seamless integration of traditional banking services with crypto and DeFi capabilities has one winner: the consumer. After all, these solutions offer the best of both worlds – the regulatory compliance and familiar interface of traditional banking, coupled with the efficiency and transparency of blockchain technology.
Hybrid platforms have been particularly transformative for individuals who have been historically underserved by the banking establishment, particularly those in the developing world. Now, rather than petition a kindly bank manager to let them open an account, these users can quickly onboard, interact with fiat, crypto or both, and participate in the global economy without friction. All they need is an internet connection.
Examples of this financial revolution are all around. Revolut is one platform that has merged conventional banking features with crypto support, granting users the ability to hold multiple currencies, access virtual and physical payment cards, and trade crypto – all while enjoying perks like travel insurance and airport lounge access.
Similarly, Crypto.com – which professes to have over 100 million users – has broken down barriers between TradFi and DeFi. While it is crypto-native as the name suggests, it operates more like a crypto-friendly bank account, its popular Visa card program providing features like free ATM withdrawals, streaming service rebates (Netflix, Spotify), and even crypto cashback.
CrossFi’s decentralized banking application, meanwhile, facilitates cross-border payments and currency conversions at a fraction of the cost of traditional remittance services. Its unique non-custodial multi-currency payment card also lets users spend crypto directly from their web3 wallet, meaning they get to maintain complete ownership of their funds rather than rely on a trusted custodian.
The platform has its own blockchain, CrossFi Chain, a high-performance Layer1 that offers dual compatibility with both EVM and Cosmos networks. Within three months of its mainnet launch last year, over 500 decentralized applications (dApps) deployed on the network – and the number has continued to rise.
Thus, CrossFi users get access to traditional financial services (those typically offered by Visa, MasterCard, Union Pay) as well as a preponderance of DeFi apps, from liquid staking protocols to decentralized exchanges (DEXs). Interestingly, CrossFi adheres to Know Your Customer (KYC) and Anti-Money Laundering (AML) processes and has achieved the Payment Card Industry Data Security Standard (PCI DSS) to certify its handling of customers’ financial information.
Why Not Both?
With the total value locked (TVL) in DeFi sitting at $127 billion, traditional banks are surely starting to realize that the crypto-economy is here to stay. And that sooner or later they will have to incorporate decentralized financial services into their offerings, lest they lose market share to upstart fintechs straddling the worlds of fiat and crypto.
Transitioning between traditional banking services and DeFi is getting easier all the time, enabling users to pay merchants, trade peer-to-peer, swap between assets, cheaply dispatch funds to friends and family, and earn yields from one simplified dashboard. Not only is this model extremely convenient but it represents a lifesaver for the underbanked, as well as citizens of unstable economies who can swap their local fiat into a dollar-pegged stablecoin whenever they wish.
The emergence of hybrid fintech solutions is only the beginning. Over time, the functionalities of these platforms is likely to expand. In the near future, expect to see support rolled out for tokenized real-world assets (RWAs), enabling account-holders to invest in commodities like real estate and art directly from their mobile apps.
Once polar opposites, traditional and decentralized technologies are gradually converging to reshape the financial landscape, transforming it into an altogether more accessible industry. A development that should please just about everyone.
