Opinion by: Gracy Chen, CEO of Bitget
Over the past decade or so, the relationship between traditional and alternative finance has undergone significant changes. It used to be “banks vs. crypto” for a while.
Now, that narrative no longer fits because many banks are hard at work experimenting with blockchain integrations and tokenized assets, alongside piloting AI projects and other fintech-related initiatives.
Why? Because standing still is no longer an option for them if they don’t want to be left behind.
According to Deloitte’s latest banking industry outlook, the adoption of tech-driven innovations and digital assets, such as stablecoins, will be among the key pillars of continued growth for traditional institutions. In other words, whether banks choose to engage with these technologies is no longer in question. The only really important factor is how coherently they manage to do it.
The next stage of this transformation will involve something that the digital asset industry has been moving toward for a long time: universality. A unified financial ecosystem, where users can move their funds seamlessly regardless of what tools they’re using, fiat or crypto.
Universality can be a new competitive advantage for TradFi institutions, and this is why they should accelerate their efforts on this front.
Crypto’s friction is technical, while TradFi’s is structural
The crypto world embraced the idea of universality early on, particularly through efforts to bridge centralized and decentralized financial systems. Admittedly, this does not mean that it has already achieved a state of perfect seamlessness today, since interoperability gaps, fragmented liquidity and various security risks still remain as persistent challenges.
But the really important point to focus on in our current context is where the friction originates.
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In crypto, fragmentation is largely a technological problem, as the industry does agree in broad terms on the direction in which it is moving. Assets should travel freely across platforms, and users should not be locked in isolated systems. In practice, the cross-chain infrastructure and shared liquidity layers may still be in the process of being built, but there is a clear consensus backing their development.
In TradFi, however, the main constraint is not really technological in nature because many of the tools required for interoperability already exist. APIs, real-time payment rails, automated compliance systems — all these things are well-understood and, in quite a few cases, already deployed at scale.
While the building blocks exist, what limits progress is the very environment in which these tools have to operate. Banks, regulators and institutional participants have yet to align on a shared vision of how truly universal financial access should look and function. There are far too many internal silos and competing initiatives in place, backed by deeply embedded governance structures, that slow down the ability to experiment and move forward in this matter
As a result, crypto continues to wrestle with how to connect systems, while TradFi is still debating whether it should at all. And this key difference is, in itself, a limiting factor much more severe than any technical constraint.
Fragmentation is no longer a natural state
Historically speaking, traditional finance has been built around strict segmentation over the course of many decades.
Institutions here have grown used to operating in neatly defined categories: retail banking, payments, wealth management, brokerage and more, all living in their own, separate environments, often supported by different infrastructure stacks and compliance systems.
While this kind of setup may make sense for institutional players, for regular users, it increasingly does not. They are forced to navigate a number of different systems, each with its own processes, settlement times and limitations.
The problem with that model is that clients these days don’t really want to think in categories. What matters more to them is the outcome: their money delivered where they want it to be and doing what they want it to be doing. Speed, efficiency and security of operations are where their greatest interest lies.
Then fintech and digital asset markets came along and offered exactly that: faster settlement times and borderless transactions, with lower costs to top it off. Moreover, unlike the well-established and long-standing TradFi institutions, fintechs have grown from the bottom up, driven by user needs and active market feedback rather than by legacy structures.
The boundaries between financial functions that these platforms offered quickly blurred. Trading platforms began offering payments, custodians introduced staking services, wallet providers integrated lending features, and so on.
This organic “convergence” may not have created perfect universality — we are still far from that point — but it did bring a fundamental shift in user expectations. An environment where they could operate unobstructed by multiple walls between different services or platforms.
Is it any wonder that so many quickly moved to this sector, to the point where incumbent banks felt genuinely threatened?
Crypto changed the path toward universality
It would be misleading to say that the crypto industry has already achieved seamless universality. Fragmentation and isolated networks still remain, and the user experience is still far from being completely frictionless.
Crypto did, however, decisively introduce interoperability as a design goal to strive for by default. Even if achieving a proper level of execution requires further efforts, it can be ironed out with time. It’s the underlying principle that truly matters: that value should not be locked into a single platform or institution.
Traditional finance, by contrast, has often treated fragmentation as a natural state of things, and even as something to be defended. Proprietary systems, separate product lines, closed-off infrastructures — all these things allowed businesses better control. Control of their client relationships, control of risks in more contained environments, and control of revenue streams tied to specific products.
When you look at it through this lens, it’s not hard to understand why these parties would adhere to complexity. It functioned as a way of protecting their interests, making it harder and costlier for clients to switch providers.
It is also true that what once served as protection is now increasingly becoming a liability. Due to the rise of fintech providers, modern-day users are already growing accustomed to financial services with instant outcomes and easy traceability. Against this backdrop, fragmentation now means slower processes and more frustration for users, which only risks driving them away.
Now that capital has gained many ways to move outside of traditional systems entirely, fragmentation has become a point of leakage, driving users toward better, more flexible alternatives.
TradFi needs to board the universality train
In 2025, the global crypto asset market stood at over $3 trillion, and more than 700 million people worldwide owned digital assets by June that year. This represents a substantial amount of capital that moves entirely beyond classic settlement systems.
Banks that once held dominance in the field of financial operations are now forced to contend with the fact that an alternative value network exists, in which they are not the sole, or even the primary, intermediary.
The core risk for banks in this context is not even that crypto would “replace” them outright; it’s that banks themselves are becoming peripheral players, while user relationships and value flows take place “elsewhere.” If customers can invest and deploy their capital across the globe without even touching a bank’s infrastructure, then banks lose relevance altogether.
As such, joining in on the “universality” model becomes a survival necessity for them rather than merely an experiment.
For users today, it no longer matters if a service is traditional or not or whether it’s centralized or not. What matters is convenience, costs and safety. If a platform allows them easy access to versatile financial services without too much hassle, then that is where their attention, and their capital, will naturally flow.
If banks play their cards right, they can turn this into an opportunity. Adopting a universal approach means they can start offering the kind of integrated financial environment users increasingly expect, thus becoming more attractive to a wider client audience.
Better yet, traditional institutions have their own strengths, such as long-standing trust, established risk frameworks and a good standing with regulators. They can use these advantages to attract customers who are interested in digital assets but for whom the crypto space itself is still somewhat unclear, making it difficult for them to confidently step into it.
Constraints are real, but inaction is costlier
Lastly, we need to acknowledge that banks face many genuine limitations and roadblocks that crypto-native players do not. From legacy infrastructures to regulatory obligations, the scrutiny banks face is serious, and not recognizing it would be doing them a disservice.
These constraints do not mean that banks can afford to do nothing. If anything, this is precisely why controlled integration is so important for them right now.
Introducing blockchain-based infrastructure can help reduce reliance on outdated systems and manual checks that slow down processes and cause inefficiencies. It can offer clearer visibility into transactions and real-time asset flows.
Banks don’t need to adopt full decentralization to benefit from this technology, but even partial progress in this direction can do a lot to smooth out their operations and boost user experience and trust — areas where traditional systems increasingly show their age.
Ultimately, universality is not about ideology or about winning vs. losing, and crypto and TradFi are not in opposition here. This is simply the objective reality of where global finance is going today, driven by evolving user desires and behavior. The real future will lie in both of these sides becoming interoperable enough for capital to move freely while also remaining properly governed and protected.
The end goal is to build a new financial layer that works regardless of where money comes from or where it needs to go. And to that end, the true competition now is between fragmented systems and connected ones, and only the latter will remain relevant as the world of finance moves forward.
Opinion by: Gracy Chen, CEO of Bitget.
This opinion article presents the contributor’s expert view and it may not reflect the views of Cointelegraph.com. This content has undergone editorial review to ensure clarity and relevance. Cointelegraph remains committed to transparent reporting and upholding the highest standards of journalism. Readers are encouraged to conduct their own research before taking any actions related to the company.
This opinion article presents the contributor’s expert view and it may not reflect the views of Cointelegraph.com. This content has undergone editorial review to ensure clarity and relevance, Cointelegraph remains committed to transparent reporting and upholding the highest standards of journalism. Readers are encouraged to conduct their own research before taking any actions related to the company.
