Original title: Blockchains for TradFi: What banks, asset managers, and fintechs should know
Original authors: Pyrs Carvolth, Maggie Hsu, Guy Wuollet
Original source: https://a16zcrypto.com/
Compiled by: Daisy, Mars Finance
Blockchain is a new layer for settlement and ownership, essentially programmable, open, and globally interconnected, and this property has spawned entirely new entrepreneurial models, forms of creativity, and infrastructure architectures. The growth trajectory of monthly active addresses in cryptocurrencies is gradually approaching the historical process of internet users breaking the billion mark, stablecoin trading volumes have surpassed traditional fiat trading scales, regulatory frameworks are accelerating towards completeness, and crypto enterprises are also transforming through mergers or public listings.
The dual effects of regulatory clarification and competitive pressure—combined with the significant enhancements blockchain brings to business outcomes and its technological maturity—are generating a sense of urgency in the traditional finance (TradFi) sector to incorporate this technology into core infrastructure. Traditional financial institutions are re-recognizing that blockchain, as a transparent and secure asset transfer tool, can enhance institutional resilience while opening up new paths for growth.
The focus of management has shifted: the question is no longer "whether" or "when" to adopt blockchain, but rather "how to" empower business at present. This awareness is driving waves of exploration, resource allocation, and organizational restructuring. As various institutions invest substantively in this field, key considerations are gradually focusing on two main themes:
The business logic of blockchain-enabled strategy
Technical modules supporting strategic implementation
This guide aims to provide solutions to these issues. It is not an exhaustive list of all use cases or protocols, but a roadmap for implementation from zero to one—clarifying key early decisions, sharing emerging practice models, and helping all parties position blockchain as core infrastructure rather than mere conceptual hype. When employed correctly, this technology can both strengthen the future competitiveness of traditional financial institutions and unleash new growth momentum.
Given the differences among banks, asset management institutions, and fintech companies (including the increasingly prominent PayFi sector) in terms of end-user interaction methods, legacy system constraints, and regulatory requirements, we provide practical and feasible implementation frameworks chapter by chapter for leaders in each industry, clarifying the application prospects of blockchain in their fields and revealing the complete path from conceptual design to product landing.
Banking industry
The banking industry appears modern on the surface, but it actually runs on ancient software systems—primarily COBOL programming language from the 1960s. These seemingly outdated systems, which comply with banking regulations, support all underlying operations. When customers click on a shiny webpage or mobile application, these front-end interfaces merely convert operation instructions into COBOL program commands from decades ago. Blockchain technology provides a new path for system upgrades while maintaining regulatory compliance.
By integrating and building blockchain systems, the banking industry is expected to move away from the "storefront bookstore" model of the early internet and transition towards a modern architecture closer to an Amazon model: adopting new types of databases and better interoperability standards. Tokenized assets—whether stablecoins, deposit receipts, or securities—are likely to become core elements of future capital markets. Adopting suitable systems to avoid being eliminated by this transformation is just the starting point; the banking industry must truly lead this transformation.
In the retail business layer, banks are exploring offering digital asset allocation solutions like Bitcoin through associated brokers as part of the overall customer experience—initially participating indirectly via ETP products, and once the SEC accounting rule SAB 121 (which effectively hinders U.S. banks from engaging in digital asset custody) is abolished, direct allocation may be realized. However, greater opportunities and practicality lie within institutional/back-end business areas, primarily reflected in three emerging application scenarios: tokenized deposits, reconstruction of settlement infrastructure, and collateral liquidity management.
Application scenarios
Tokenized deposits are fundamentally changing the flow and operation of funds within commercial banks. This is not merely a theoretical concept—projects like JPM Coin from JPMorgan and cash token services from Citigroup have already been applied in practice. They are neither synthetic stablecoins nor digital assets backed by government bonds, but rather regulated tokens backed 1:1 by real fiat currency in commercial bank accounts, circulating on private or permissioned public chains (which will be elaborated on later).
In areas such as cross-border payments, fund management, and trade finance, deposit tokenization can shorten settlement cycles from days to seconds. Banks can use this to reduce operational costs, minimize reconciliation requirements, and enhance capital efficiency.
The banking industry is also actively restructuring settlement infrastructure. Several tier-one banks are collaborating with central banks or blockchain-native organizations to conduct distributed ledger settlement experiments to address the inefficiencies of the "T+2" system. For example, Matter Labs, the parent company of the Ethereum layer two network zkSync, is working with multinational banks to demonstrate near-real-time settlement in cross-border payments and intraday repurchase agreement markets. Its commercial value is reflected in improved capital efficiency, optimized liquidity, and reduced operational costs.
Blockchain and token technologies can also enhance banks' rapid asset reallocation capabilities across departments, regions, and counterparties—namely, collateral liquidity. The smart asset net value pilot recently launched by the traditional U.S. market clearing and custody institution DTCC has modernized collateral liquidity through tokenized net value data. This pilot demonstrates that collateral can possess cash-like programmability, which not only upgrades bank operations but also supports their strategic expansion. Improved collateral liquidity helps reduce capital buffers and broaden liquidity pools, allowing banks to participate in capital market competition with more streamlined balance sheets.
In the three key scenarios of tokenized deposits, reconstruction of settlement facilities, and collateral liquidity, banks face critical decisions—the foremost being whether to adopt private/permissioned chains or public chains.
Choosing a blockchain
Although banks were previously restricted from accessing public blockchain networks, recent guidance from banking regulators like the OCC has opened up possibilities. The integration collaboration between R3 Corda and Solana is an example—this partnership allows assets on the Corda permissioned chain to be settled directly on the Solana network.
Taking tokenized deposits as an application scenario, we will explore key early decisions in the marketization process of products, from blockchain selection to the level of decentralization. While there are many dimensions to consider in blockchain selection, developing on decentralized public chains can yield multiple product advantages:
• Providing a neutral developer platform: Anyone can participate in ecosystem building, enhancing trust and expanding product support ecosystems.
• Accelerating product iteration: Achieving rapid innovation through reusing, adapting, and combining modules developed by others (i.e., composability)
• Enhancing platform credibility: Top developers are more inclined to build on decentralized chains that won't suddenly change rules, ensuring that their products continuously create business value.
In contrast, centralized public chains, where owners can arbitrarily modify rules or review applications, as well as non-programmable blockchains, cannot enjoy the benefits of composability.
Although current blockchain performance still lags behind centralized internet services, its processing capacity has significantly improved in recent years. Ethereum layer two scaling solutions (such as Coinbase's Base) and high-performance Layer1 chains (like Aptos, Solana, and Sui) can now achieve transaction costs below 1 cent and latency under 1 second.
Degree of decentralization
Banks also need to weigh the appropriate level of decentralization based on specific application scenarios. The core principle of the Ethereum blockchain protocol and its community is to ensure that any global user can independently verify each transaction on the chain. On the other hand, Solana has relaxed this standard by increasing the hardware requirements for validator nodes, but has simultaneously significantly improved on-chain performance.
Even for public chains, banks need to consider the extent of centralization impact. For instance, if the total number of validator nodes in a network is small, and that network's foundation controls a large proportion of the validator node set, then the actual centralization impact on that chain will far exceed the surface level of decentralization presented. Similarly, if entities associated with the public chain (such as foundations or labs) hold a large amount of tokens, those tokens could be used to intervene in or control network decisions.
Privacy considerations
Privacy and confidentiality are critical considerations for all bank transactions, partly stemming from legal requirements. The rise and application of zero-knowledge proof technology can effectively protect sensitive financial data, even on public chains. Such systems achieve privacy protection by proving that an entity possesses specific information (e.g., the user is over 21 years old) without disclosing the exact content (e.g., date of birth or place).
Zero-knowledge-based protocols (such as zkSync) can achieve private chain transactions. To maintain compliance, banks also need the ability to view and roll back transactions when necessary. The "viewing key" technology developed by Aleo allows regulatory bodies and auditors to view transactions on demand while protecting privacy.
Solana's token extension capabilities provide compliance confidentiality features, while Avalanche's Layer1 chain possesses the unique ability to execute arbitrary validation logic through smart contracts.
Most of these features also apply to stablecoins. As one of the most popular blockchain applications today, stablecoins have become the lowest-cost method for dollar transfers. In addition to reducing fees, they also possess programmability and scalability without permission—anyone can integrate globally available fast funds into products using stablecoin channels while developing new fintech functionalities. According to the requirements of the (GENIUS Act), banks must maintain transparency in stablecoin transactions and reserves. Companies like Bastion and Anchorage can simultaneously provide solutions for transaction and reserve transparency.
Custody decisions
When formulating cryptocurrency custody strategies, most banks choose to collaborate with specialized custody institutions rather than building their own custody systems. Some custodial banks like State Street are planning to launch their own crypto custody services.
When choosing custody partners, banks should focus on evaluating:
• Licenses and Certifications: Must have a banking/trust license (federal or state level), virtual currency business license, state remittance license, and compliance certifications such as SOC2. For example, Coinbase conducts custody business under a New York trust license, Fidelity operates through a digital asset service subsidiary, and Anchorage holds a federal OCC license.
• Security measures: Including high-strength encryption, hardware security modules (HSM) to prevent unauthorized access, and protective mechanisms such as splitting private keys through multi-party computation (MPC) technology.
• Operational Standards: Must implement an asset segregation system, a transparent reserve proof mechanism, and regular third-party audits. For example, Anchorage uses biometric multi-factor authentication and geographically distributed key sharding technology while establishing a comprehensive disaster recovery plan.
Positioning of wallets within custodial systems
Banks are increasingly recognizing that crypto wallet integration is a strategic necessity for competing with digital banks, centralized exchanges, and other ancillary service providers. For institutional clients (hedge funds, asset management companies, etc.), wallets serve as enterprise-level tools combining custody, trading, and settlement; for retail clients (small businesses and individuals), wallets act as embedded functions hidden behind digital asset access interfaces. In both scenarios, wallets are not merely storage solutions but also channels for secure and compliant access to stablecoins or tokenized government bonds through private keys.
Custodial wallets and self-custodial wallets form a spectrum at opposite ends in terms of control, security, and responsibility. The former has third parties managing keys, while the latter is controlled by users. Understanding this difference is crucial for banks—they need to meet the strong compliance demands of institutional clients while balancing the autonomy requests of professional clients and the convenience preferences of mainstream retail clients. Custodians like Coinbase offer institutional-grade wallet solutions, while companies like Dynamic provide supporting solutions needed for modern banking applications.
Asset management institutions
For asset management institutions, blockchain can expand distribution channels, automate fund operations, and obtain on-chain liquidity.
Tokenized funds and real-world assets (RWA) provide a new packaging approach, making asset management products more accessible and composable—especially to meet global investors' growing expectations for 24/7 access, instant settlement, and programmable trading. At the same time, on-chain channels can significantly simplify back-office workflows, from calculating net asset values to managing equity structures. Ultimately achieving reduced costs, accelerated product launches, and differentiated product portfolios—these advantages will have a compounded effect in a competitive market.
Asset management institutions are currently focusing on expanding distribution channels and liquidity for products that are most likely to attract digitally native user funds. By listing tokenized share classes on public chains, asset management institutions can reach new types of investors while retaining traditional transfer agent ledger systems. This hybrid model meets regulatory requirements while leveraging the unique new markets and new functionalities of blockchain.
Trends in blockchain innovation
The tokenization scale of U.S. Treasury securities and money market funds has grown from nearly zero to hundreds of billions of dollars, with representative products including BlackRock's BUIDL fund and Franklin Templeton's BENJI token. These tools are similar to interest-generating stablecoins but come with institutional-grade compliance backing.
This enables asset management institutions to offer more flexible services to digitally native investors through share fragmentation and programmability (such as automatic portfolio rebalancing or yield tiering).
On-chain distribution platforms are becoming increasingly mature. Asset management institutions are actively collaborating with blockchain-native issuers and custodians like Anchorage and Coinbase to achieve tokenization of fund shares, automate investor access, and expand coverage across regions and investor categories.
On-chain transfer agents can natively handle KYC/AML, investor whitelisting, transfer restrictions, and equity structure management through smart contracts, reducing the legal and operational costs of fund structures.
Leading custodians ensure the secure custody, transferability, and compliance of tokenized fund shares, while expanding distribution possibilities while meeting internal risk control standards.
Issuers are building funds as DeFi primitives and integrating on-chain liquidity to expand reachable markets and manage scale. By launching tokenized funds on protocols like Morpho Blue or integrating Uniswap v4, asset management institutions can access new liquidity. BlackRock's BUIDL fund became an income collateral option for Morpho Blue in mid-2024, pioneering the integration of traditional asset management products into DeFi. Subsequently, Apollo Group also connected its tokenized private credit fund ACRED to Morpho Blue, achieving a yield enhancement strategy that could not be realized in the off-chain world.
The ultimate effect of collaboration with DeFi is that asset management institutions can upgrade from the expensive and slow fund distribution model to direct access methods to wallets, while creating new revenue opportunities and capital efficiency for investors.
When issuing tokenized RWAs, asset management institutions have largely moved beyond the debate over private vs. public chains, clearly leaning towards adopting public multi-chain strategies to achieve broader product distribution. For instance, Franklin Templeton's BENJI token fund has covered eight major blockchain networks, including Aptos and Arbitrum. By collaborating with well-known public chains, these products can also gain liquidity boosts from partners within each chain's ecosystem, including centralized exchanges, market makers, and DeFi protocols. Solutions for cross-chain interoperability provided by companies like LayerZero are supporting the implementation of such multi-chain strategies.
Tokenization of real-world assets (RWA)
The trends we observe mainly focus on the tokenization of financial assets (such as government bonds, private sector securities, and stocks), rather than physical assets like real estate or gold (although these assets also have tokenization potential and existing cases).
In the field of tokenized traditional funds (such as U.S. Treasury securities or currency market funds backed by similar stable assets), the distinction between "encapsulated tokens" and "native tokens" is crucial. This difference is reflected in how tokens represent ownership, the storage location of the share ledger, and the level of integration with the blockchain. Both models drive the tokenization process by connecting traditional assets with blockchain, but encapsulated tokens focus on compatibility with traditional systems, while native tokens pursue complete on-chain transformation. The following two cases illustrate their differences:
BUIDL is an encapsulated token. It tokenizes traditional money market fund shares that invest in cash, U.S. Treasury bills, and repurchase agreements. Although the ERC-20 standard BUIDL token achieves on-chain circulation of these shares, the underlying fund remains a chain-off entity regulated by U.S. securities laws. Ownership is limited to qualified institutional investors, minted/redempted through Securitize, and is custodied by BNY Mellon.
BENJI, on the other hand, is a native token representing shares in the $750 million Franklin on-chain U.S. government money fund (FOBXX). This fund invests in U.S. government securities, with the blockchain serving as the official system for processing transactions and recording ownership—making BENJI a native token rather than an encapsulated form. Investors can subscribe using USDC via the Benji Investments app or institutional portal, with the token supporting direct on-chain peer-to-peer transfers.
In the process of issuing tokenized funds, asset management institutions typically require digital transfer agents to adapt traditional transfer agent functions to the blockchain environment. Most institutions choose to collaborate with Securitize, which assists in the issuance and transfer of tokenized funds while ensuring the accuracy and compliance of account records. These digital transfer agents not only enhance efficiency through smart contracts but also open up new possibilities for traditional assets. For example, Apollo Group's ACRED (as an encapsulated token connecting its off-chain diversified credit fund) optimizes borrowing and yield structures through DeFi integration. Securitize facilitated the creation of sACRED (the ERC-4626 compliant version of ACRED), allowing investors to implement leveraged cycling strategies using the Morpho decentralized lending protocol.
When encapsulated tokens need to coordinate on-chain operations with off-chain records, some institutions have achieved advancements through native token on-chain transfer agents. Franklin Templeton has developed a proprietary on-chain transfer agent system under the guidance of regulators to support instant settlement and 24/7 transfers for BENJI. The Opening Bell project, in collaboration with Superstate and Solana, also features a built-in on-chain transfer agent to enable uninterrupted transfers.
Positioning of wallets
Asset management institutions should not view the "wallet solutions for how customers access products" as a secondary issue. Even if the issuance and distribution are outsourced to transfer agents and custodians, careful selection and integration of wallet systems are still necessary, as this directly impacts investor adoption rates and regulatory compliance.
A common practice is to use wallet-as-a-service (WaaS) to create custodial wallets for investors, with service providers automatically executing KYC and transfer agent restrictions. However, even if the transfer agent "owns" the wallet, asset management institutions still need to embed relevant APIs into investor portals, selecting SDK development kits and compliant modules that align with product roadmaps.
Other key considerations for tokenized funds involve fund operations. Asset management institutions need to determine the level of automation in calculating net asset values (NAV), such as using smart contracts for intraday transparency or relying on off-chain audits to ascertain the final daily net value. Such decisions depend on the type of token, underlying asset class, and specific fund compliance requirements. Redemption mechanisms are equally critical—while tokenized funds support faster exits than traditional systems, they still need built-in liquidity management constraints. In these aspects, asset management institutions typically rely on transfer agents to connect to key service providers such as oracles, wallets, and custodians.
As mentioned in the custody decision section, the regulatory qualifications of the chosen custodian must be considered. According to SEC (custody rule) requirements, service providers must be selected with qualified custodian qualifications to protect client assets.
Fintech companies
Fintech companies (especially PayFi companies in the payment and consumer finance sectors) are leveraging blockchain to build faster, lower-cost, and globally scalable services. In this crowded market where innovation speed determines success, blockchain provides out-of-the-box identity verification, payment, credit, and custody infrastructures—often significantly reducing intermediary roles.
These companies are not simply replicating existing systems but are seeking leapfrog development. This makes blockchain particularly critical in cross-border scenarios, embedded finance, and programmable currency applications. For example, Revolut’s virtual card allows users to use cryptocurrencies in daily spending; Stripe's stablecoin financial accounts enable businesses to hold balances in stablecoins across 101 countries.
For these enterprises, blockchain is not merely an infrastructure upgrade or efficiency tool but rather the technological cornerstone for creating entirely new business models.
Tokenization technology allows fintech companies to embed 24/7 real-time global payments directly on-chain while unlocking new fee services related to issuance, redemption, and fund flows. Programmable tokens support native functions within applications such as staking, lending, and providing liquidity, enhancing user stickiness and creating diversified revenue streams. These advantages become crucial in an increasingly digital world for retaining clients and acquiring new users.
We observe that three major trends—stablecoins, tokenization, and verticalization—are forming.
Three key trends
Stablecoin payment integration is revolutionizing payment channels, enabling year-round real-time settlement and breaking free from the constraints of traditional payment networks limited by bank operating hours, batch processing, and jurisdictional boundaries. By bypassing traditional card networks and intermediaries, stablecoin channels significantly reduce exchange fees, foreign exchange fees, and transaction fees—especially in peer-to-peer and B2B scenarios.
With the help of smart contracts, businesses can directly embed rules for conditional payments, refunds, royalty splits, and more into the transaction layer, creating new profit models. This may prompt companies like Stripe and PayPal to transition from bank channel aggregators to native issuers and processors of programmable currencies.
Global remittances have long been plagued by high fees, long delays, and opaque foreign exchange spreads. Fintech companies are reconstructing the cross-border value transfer model through blockchain settlement. Using stablecoins (such as USDC on Solana/Ethereum or USDT on Bitcoin) can significantly reduce remittance costs and settlement times. Both Revolut and Nubank have partnered with Lightspark to achieve real-time cross-border payments through the Bitcoin Lightning Network.
By storing value in wallets and tokenized assets (rather than circulating through banking systems), fintech companies gain stronger control and faster speeds, which is particularly significant in regions where bank systems are unstable. For Revolut and Robinhood, this enables their transformation into global flows of funds platforms rather than merely digital banks or trading applications. For global payroll service providers like Deel and Papaya Global, offering payroll in cryptocurrencies/stablecoins has become a popular option due to its support for real-time payments.
Crypto-native fintech companies are extending downstream, reducing reliance on third parties by building their own blockchains (Layer1 or Layer2) or acquiring enterprises. Utilizing Coinbase's Base, Kraken's Ink, and Uniswap's Unichain (all developed based on OP Stack) is akin to upgrading from iOS app developers to owning a complete platform ecosystem as mobile operating system owners.
If companies like Stripe, SoFi, or PayPal launch their self-developed Layer2, they can capture value at the protocol layer to supplement front-end products. First-party chains can also customize performance, whitelisting, and KYC modules, which is crucial for regulated scenarios and enterprise clients.
By building a dedicated payment chain on the Ethereum Layer2 network Optimism through OP Stack (a modular open-source framework), fintech companies can transition from closed garden models to open and diverse financial innovation markets. Participation from other developers and enterprises will collectively drive network growth and create revenue.
Most fintech companies start with basic services (such as limited currency trading/sending/receiving/storing) and gradually add advanced features like yield and lending. SoFi recently announced plans to restart cryptocurrency trading services (which it exited in 2023 due to regulatory restrictions), not only empowering users to participate in the aforementioned global remittances but potentially combining this with its main lending business in the future, improving term transparency through on-chain lending (similar to the collaboration between Morpho and Coinbase for Bitcoin collateral loans).
Building a dedicated blockchain
A batch of crypto-native fintech companies (like Coinbase, Uniswap, Worldcoin) have built their own blockchains aimed at customizing infrastructure for their specific products and users, reducing costs, enhancing decentralization, and capturing more value within the ecosystem. For instance, Uniswap's Unichain can integrate liquidity and reduce fragmentation, making DeFi faster and more efficient. This vertical integration strategy is equally applicable to fintech companies aiming for user experience upgrades and value internalization (such as Robinhood recently announcing its development of Layer2). For payment companies, dedicated chains are likely to become infrastructure prioritized for user experience—such as hiding the details of crypto-native operations—focusing more on stablecoin products and compliance functionalities.
Building a dedicated blockchain requires weighing core considerations across different complexity levels:
Layer1 solutions are the most difficult to implement, the most complex to build, and the hardest to leverage network effects. However, they give businesses absolute control over scalability, privacy, and user experience. For example, Stripe can embed native privacy features to meet global regulatory requirements, or customize ultra-low latency consensus mechanisms for high-frequency merchant payments.
The core challenge of building a new Layer1 lies in ensuring the economic security of the launch chain—attracting substantial staked capital to guarantee network security. EigenLayer reduces the barrier to obtaining high-quality security by shifting the model from isolated high-cost Layer1s to a shared efficient model, thereby accelerating blockchain innovation and reducing failure rates.
Layer2 is often the ideal compromise, allowing fintech companies to operate with a single sequencer and retain some degree of control. The sequencer is responsible for collecting user transactions, determining processing order, and submitting them to Layer1 for final validation and storage. The single sequencer design can accelerate the development process and ensure operational reliability, high performance, and revenue capture capabilities. By leveraging Rollup-as-a-Service (RaaS) providers or established Layer2 alliances like Optimism's superchain, it's easier to build Layer2 on Ethereum, sharing infrastructure, standards, and community resources.
For example, PayPal could build a "payment superchain" on OP Stack to optimize the performance of its PYUSD stablecoin in real-time scenarios like transfers within the Venmo app. By initially adopting a centralized sequencer to achieve controllable fees (e.g., $0.01 per transaction) while inheriting Ethereum's security, PYUSD would also be able to achieve seamless cross-chain circulation within the Optimism superchain ecosystem. If choosing to collaborate with RaaS providers like Alchemy, deployment periods could be shortened to weeks (Layer1 typically takes months or even years).
The simplest path is to deploy smart contracts on existing blockchains (such as PayPal's current solution). For fintech companies, public chains like Solana with mature scale, user bases, and unique assets are particularly attractive.
Distinction between permissioned and non-permissioned
What level of openness should fintech applications/chains maintain? The core advantage of blockchain lies in composability—achieving a 1+1>2 effect through protocol mixing. If a permissioned model is adopted, it will significantly limit composability and hinder the emergence of novel applications. For instance, by choosing to build a non-permissioned chain, PayPal not only aligns with the trend of an open fintech ecosystem but also monetizes its compliance moat—global developers can attract users using PayPal's compliance layer, and user growth will feed back into network value.
Unlike Layer1 solutions like Ethereum, where validators directly handle consensus ordering, Layer2 offloads most of the work to sequencers to achieve high throughput while inheriting Layer1 security. As mentioned earlier, sequencers are key control points, and single-sequencer Rollups like Soneium offer interesting paths—operators can adjust transaction delays and restrict specific transactions.
Building based on modular frameworks (such as OP Stack) can not only create incremental revenue but also extend the utility of core products. For example, PayPal and its PYUSD stablecoin, their own Layer 2 can generate sequencer revenue while deeply binding on-chain economics with PYUSD. As the initial sequencer operator, PayPal can capture a portion of transaction fees (similar to the practices of Coinbase's Base chain). By modifying OP Stack's gas payment system to support PYUSD, PayPal can offer existing users "free" transactions (hidden fees), enhancing usage frequency in scenarios such as Venmo transfers and cross-border remittances. Similarly, PayPal could attract developers through low fees while charging moderate premiums for integrated services like the PayPal wallet API or compliant oracles.
Banks, asset management institutions, and fintech companies face a common confusion regarding blockchain applications: in the rapidly evolving crypto space, how to grasp the essence of technology and business opportunities? We summarize three key principles:
Customer segmentation customization: Institutional clients require strong compliance custody solutions, while retail users prefer easy-to-use self-custody for daily access.
Strict adherence to security and compliance baseline: This is the common expectation of regulators and all clients.
Leveraging cooperation to accelerate implementation: There’s no need to reinvent the wheel; working with domain experts and partners can shorten time to market and unlock innovative solutions to generate new revenue streams.
Blockchain should become the core infrastructure of traditional finance—it can enhance the future competitiveness of institutions and open up new markets, new users, and new revenues.
