TradeFi (Traditional Finance) — is the classical financial system, including banks, exchanges, brokers, clearing centers, and regulators. For decades, TradeFi has shaped the global economy, enabling asset trading, lending, and capital management.
The emergence of blockchain has become a key technological challenge to this system, initiating a profound transformation of financial markets.
Origins of TradeFi
Historically, TradeFi developed around:
centralized institutions (banks, exchanges);
intermediaries (brokers, depositories);
closed registries and complex settlement procedures.
Such a model provided stability but had fundamental limitations: high fees, low transparency, long settlement times (T+2 / T+3), dependence on trust in intermediaries.
The emergence of blockchain as a challenge to TradeFi
In 2008, the concept of Bitcoin was published, proposing:
decentralized ledger;
direct P2P transactions;
cryptographic trust instead of institutional trust.
This became the starting point for rethinking financial processes. Later, Ethereum expanded the capabilities of blockchain through smart contracts, allowing for the automation of trading, clearing, and settlements.
Evolution: from conflict to integration
Initially, TradeFi viewed blockchain as a threat. However, from 2016 to 2018, the phase of institutional adoption began:
banks started testing private and consortium blockchains;
stock markets — asset tokenization;
regulators — legal frameworks for digital assets.
Major players, including JPMorgan Chase, Goldman Sachs, and BlackRock, began implementing blockchain solutions for settlements, repo operations, and liquidity management.
Tokenization: a bridge between TradeFi and blockchain
One of the key stages was the development of real asset (RWA) tokenization:
equities;
bonds;
real estate;
commodities.
Blockchain allows:
fractionalizing assets;
provide 24/7 trading;
accelerate settlement to T+0;
increase ownership transparency.
This is not a replacement for TradeFi, but rather its technological upgrade.
TradeFi vs DeFi: fundamental differences
Criterion
TradeFi
DeFi
Control
Centralized
Decentralized
Trust
Institutions
Code and mathematics
Access
Limited
Global
Settlements
Slow
Almost instant
Regulation
Rigid
Emerging
Today, the market is moving towards Hybrid Finance (CeFi + DeFi), where the strengths of both models are combined.
The role of regulators
For sustainable integration of blockchain into TradeFi, regulation remains a key factor:
KYC / AML;
custodian licensing;
legal status of tokens;
investor protection.
EU, US, UAE, and Singapore jurisdictions are forming a regulatory framework that allows TradeFi to safely use blockchain.
The future of TradeFi in the era of blockchain
Key trends:
mass tokenization of assets;
on-chain settlement;
programmable money (CBDC, stablecoins);
integration of AI and blockchain in trading and risk management.
TradeFi is not disappearing — it is evolving into a more transparent, faster, and technology-driven financial system.
Conclusion
The history of TradeFi in blockchain is a journey from denial to synergy. Blockchain has become not a disruptor of traditional finance, but its next technological level. Companies and governments that are the first to adapt to this model will gain a strategic advantage in the global financial system of the 21st century.
