The global economy is still struggling to escape the turmoil that began in the wake of the global coronavirus pandemic and the Russian invasion of Ukraine. While high interest rates and runaway inflation continue to pressure global markets, it’s notable that the gap between traditional finance and crypto is rapidly closing.&nbsp; 
Examples of this include the crypto exchange Bitpanda’s decision to add <a href="https://www.bitpanda.com/en/invest/bitpanda-commodities" target="_blank" rel="noopener">traditional commodities</a> to its platform in September 2022, enabling digital currency traders to explore the world of more established assets such as oil and gas and staple foods such as wheat and rice. Moreover, Kraken, one of the world’s most established crypto exchanges, recently announced the launch of its <a href="https://bitcoinist.com/kraken-plans-to-support-stock-trading-in-2024/" target="_blank" rel="nofollow noopener">Kraken Securities division</a> to offer stock and exchange-traded fund (ETF) trading to its users. 
Moving in the other direction, the online financial derivatives trading platform <a href="https://multibankfx.com/" target="_blank" rel="nofollow noopener">MultiBank</a>, which traditionally caters to the commodities, stocks and shares and foreign exchange markets, recently embraced crypto with the launch of its <a href="https://multibank.io/" target="_blank" rel="nofollow noopener">MultiBank.io platform</a>. With its launch, TradFi investors have a user-friendly way to access digital assets for the first time through a familiar platform they trust.&nbsp; 
These developments suggest that traders on both sides of the crypto/TradFi equation are looking for solutions that bring the two worlds closer together. One of the reasons for this is that it has become clear that crypto and TradFi both have a lot to offer the other. For instance, TradFi platforms can improve their accessibility and transparency with crypto trading. Meanwhile, crypto ecosystems can learn a lot about risk mitigation by studying the world of TradFi.&nbsp; 
<a href="https://triple-a.io/crypto-ownership-data/" target="_blank" rel="nofollow noopener">Statistical data</a> suggests that as many as 300 million individuals in the world now own some crypto, highlighting the need for common ground. Additionally, many major TradFi institutions are looking to adopt crypto, with <a href="https://ripple.com/reports/New-Value-Crypto-Trends-in-Business-and-Beyond-2022.pdf" target="_blank" rel="nofollow noopener">research</a> finding that 76% of all major banks and investment firms plan to look at the potential of digital assets.&nbsp; 
For TradFi institutions, it’s logical that they’d want to embrace the world of crypto as it becomes more mainstream. Crypto is a rapidly growing industry, and many of these firms desire to increase their market share as more of their customers express interest in it. Crypto firms themselves can benefit from the greater liquidity found in TradFi, as well as the higher degree of trust.&nbsp; 
Many people in the two industries believe there is room for TradFi and crypto to co-exist, and they can help each other to increase access, choice and control. With greater TradFi participation in crypto, the security of digital assets can be improved and more use cases can be discovered, creating greater choice and confidence for users. With the addition of TradFi liquidity into crypto, digital asset markets can become stabler and less volatile.&nbsp; 
TradFi investors are aware that by jumping on the digital asset bandwagon, they can accelerate their profits with an asset class that has shown its potential to massively out-earn conventional markets when the conditions are right. In addition, the collective experience of TradFi markets can help crypto to overcome the numerous pitfalls of the unpredictable financial world. There are numerous individuals and organizations that have consistently raked in profits in the traditional financial markets amid the historic cycle of economic boom and bust.&nbsp; 
There’s also potential for the protective mechanisms of corporate governance, developed in the world of TradFi, to merge with the communal benefits offered by decentralized autonomous organizations. This merger could lead to the creation of a more holistic financial system that’s fair, transparent, regulated and inclusive. In essence, the two worlds can learn from each other.&nbsp; 
The integration of crypto and TradFi might well be the natural evolution for both environments. Crypto will pave the way for new investment opportunities that don’t exist in traditional markets, while onboarding digital natives into the greater stability of TradFi.&nbsp; 
This is already happening. In the case of Kraken, it is paving the way for crypto traders to <a href="https://www.bloomberg.com/news/articles/2023-09-27/crypto-exchange-kraken-to-offer-trading-in-us-stocks-rivaling-robinhood-hood" target="_blank" rel="nofollow noopener">explore the world of commodities</a>, utilizing their experience of digital asset trading in environments that provide greater stability. On the other hand, MultiBank is <a href="https://paymentexpert.com/2022/05/10/multibank-launch-new-crypto-platform-with-danny-willet-as-its-new-sponsored-athlete/" target="_blank" rel="nofollow noopener">building a gateway</a> for experienced investors in the traditional markets to bring their enormous liquidity into the digital asset market and explore its unique profit-making potential. It does this with a higher degree of trust than what crypto-native platforms can provide. 
Merging crypto with TradFi has the potential to facilitate a huge influx of institutional and retail investors into the digital asset world. At the same time, it can help to foster greater transparency and accessibility within TradFi itself. As this merger gathers pace, it will be interesting to see if the economic landscape evolves into a new paradigm that provides the best of both worlds for every participant. 
The subject matter and the content of this article are solely the views of the author. FinanceFeeds does not bear any legal responsibility for the content of this article and they do not reflect the viewpoint of FinanceFeeds or its editorial staff.

The Merger Of Crypto & TradFi Can Bring Out The Best Of Both Worlds

FinanceFeeds

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