Bridging TradFi and DeFi: The Future of Payments in a Web3 World
As we look ahead to 2025, The Paypers is keenly exploring the burgeoning world of Web3 payments. With options like stablecoins, tokens, and Central Bank Digital Currencies (CBDCs) becoming more prevalent, both businesses and consumers are poised to benefit from faster and more efficient transactions on a global scale.
Video Insights: TradFi Meets DeFi
In our ongoing video interview series focusing on blockchain-based payments, we delved into the fascinating intersection of Traditional Finance (TradFi) and Decentralized Finance (DeFi). This session was inspired by Jason Ekberg’s thought-provoking article, “Will Crypto Cross the Chasm?” Jason discusses the transformative potential of blockchain technology in reshaping the landscape of asset representation and management.
Defining TradFi and DeFi
For the uninitiated, TradFi refers to the realm of traditional financial systems. Think banks, third-party payment processors, and institutions grounded in an account-based financial infrastructure. DeFi, on the other hand, is the wild, decentralized frontier, populated by blockchain-native entities like Uniswap, Circle, Tether, and Coinbase operating in a decentralized ecosystem.
The Convergence of Financial Worlds
These two worlds are beginning to converge, especially in the realm of payments, thanks to supportive regulatory changes and political endorsements. Jason sees enormous potential for blockchain technology within financial services, particularly in banking. He identifies four crucial dimensions where crypto technologies are bridging the gap:
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Crypto as an asset class: Once the domain of speculative investors, cryptocurrencies are maturing into a legitimate investment category.
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Blockchain for payments: Imagine 24/7 transactions that are fast, secure, and cost-effective, all without the need for intermediaries.
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Tokenisation: This involves the digital representation of assets like funds, bonds, and commodities, enhancing liquidity, transparency, and accessibility.
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Blockchain-native clients: Companies like Coinbase and Riot Blockchain, which are deeply embedded in the crypto space, are evolving into significant client segments for traditional financial services.
The Road to Mainstream Acceptance
Jason is optimistic about the transition of crypto from niche adoption to mainstream acceptance, particularly with the backing of the new U.S. administration. Regulatory advances, such as MiCA and the development of a euro-based stablecoin, are paving the way for this transition.
Trends to Watch in 2025
As we wrapped up the discussion, we highlighted key trends to watch for in 2025. While crypto may not yet dominate retail payments, there’s a growing base of users eager to transact using digital assets. Building the necessary infrastructure and expanding acceptance will be critical themes in the coming years.
For a deeper dive into our discussion, don’t miss the full interview. We’d love to hear your thoughts and insights!
About Jason Ekberg
Jason Ekberg is a partner in the Corporate and Institutional Banking (CIB) practice at Oliver Wyman. His focus is on advising senior leaders, investors, and regulators on business strategy, digital innovation, and transformative topics. With over 20 years of experience, Jason has worked globally, including across major financial centers and 30 countries, with a particular emphasis on Asia.
About Oliver Wyman
Oliver Wyman is a global leader in management consulting, with a presence in over 70 cities across 30 countries. The firm offers deep industry insights combined with specialized expertise in strategy, operations, risk management, and organizational transformation, helping clients optimize their business performance and seize attractive opportunities. Oliver Wyman is a part of Marsh McLennan [NYSE: MMC].
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