TradFi and Crypto: Rules and Tech Pave the Way
The finance world is evolving. Traditional finance (TradFi) and crypto are merging, driven by clearer regulations and advanced technology. Experts discussed this shift at a recent event in Hong Kong.
Rules Matter
Clear regulations provide companies with the confidence to operate. Jason Urban from Galaxy Digital emphasized this, comparing rules to train tracks that guide the way.
Other experts agreed, highlighting recent changes in the U.S. For example, the approval of spot crypto ETFs in 2024 marks a significant milestone. It signals that crypto is no longer just for speculators but is becoming a mainstream investment.
The Role of Derivatives
Derivatives are playing a pivotal role in attracting trillions of dollars from large institutions. This trend extends beyond bitcoin to a variety of tokens.
Jennifer Ilkiw from ICE Futures U.S. discussed new products, including overnight rate futures tied to USDC, set to launch in April. She also mentioned multitoken indexes, indicating institutional interest in diversified crypto investments.
Bridging TradFi and DeFi
Josh Lim from FalconX spoke about connecting TradFi and DeFi. His company helps hedge funds leverage liquidity pools in DeFi, bridging traditional exchanges with decentralized finance.
Tom Staudt from ARK Invest called spot bitcoin ETFs a milestone, making crypto mainstream. However, he stressed the need for a broader market standard, advocating for a diversified index beyond just bitcoin.
The Risk of Inaction
Urban warned against inaction, likening it to career suicide. He highlighted that real-world assets are moving onchain, urging companies to adapt to this transformation.
