The Integration and Future Evolution of Traditional and Emerging Financial Systems

Collaborative Pathways Between TradFi × Crypto

The integration of traditional finance and crypto finance is not simply embedding blockchain into existing systems, but rather a gradual process of structural adjustment. The most feasible approach today is to introduce the efficiency and transparency advantages of blockchain without overturning core regulatory and risk frameworks.

In practice, this collaboration typically manifests in several ways:

• Traditional institutions issue, settle, or reconcile assets on-chain
• Crypto infrastructure provides institutions with more efficient cross-border payment and clearing solutions
• Stablecoins and tokenized assets act as intermediaries connecting both systems

In this model, TradFi continues to fulfill credit, compliance, and risk management functions, while Crypto primarily delivers technological and efficiency support.

The Trend Toward Modular Financial Infrastructure

As financial system complexity increases, monolithic and tightly coupled infrastructure is exposing limitations in scalability and adaptability. The modular approach driven by blockchain is influencing the design of the entire financial infrastructure.

Under modularization, different functional layers—such as payments, clearing, settlement, custody, and risk control—can be separated and evolve independently, no longer needing to be managed by the same institution or system. This structure makes it easier for financial systems to upgrade, replace components, or integrate new technologies, while also reducing systemic risk from single points of failure.

Modularity does not mean radical decentralization; rather, it allows different roles to operate at the layers where they excel, creating a more flexible financial network.

Competition and Coexistence in Future Financial Systems

In the long run, future financial systems will likely feature multi-layered coexistence rather than dominance by a single model. Traditional finance will continue to serve highly regulated, large-scale mainstream economic activities, while blockchain-based new financial systems will keep expanding in cross-border scenarios, innovative assets, and high-efficiency environments.

This landscape means:

• Different systems hold advantages in different markets and user groups
• Technology standards, regulatory frameworks, and infrastructure will gradually align
• Financial innovation will persist within compliance boundaries

Ultimately, competition will not disappear but will shift from a battle of approaches to a contest of structure and efficiency.