Opinion by: Mark Jones, founder of Hana Wallet
It is often forgotten that the first emails were sent between college professors looking to share files and work together in the early 1970s. Sending emails between two professors initially involved using a closed system between two computers on the Arpanet that would allow messages to be sent over the file transfer protocol.
The process is slow, complicated, time-consuming and as such has not gained any traction beyond Ivy League universities or government research facilities.
Web browsing entered the mainstream only when the hypertext transfer protocol (HTTP) was created and the usability issue was addressed.
Current Defi protocols are similar to their Web2 predecessors in that they are complex and guarded by philosophical zealots who oppose engaging in traditional financial services (tradfi). Although it is not hard to see why crypto believers are critical of tradfi, given the failures that led to the crash of 2008, this intransigence is preventing progress and Defi’s potential from being fulfilled.
Together and tradfi
Should be The leaders at Defi and Tradfi decided to work together, We can look back at the current time as a similar inflection point in web browsing in the 1990s – when digital asset service providers broke down the barriers between tradfi and defi platforms, enabling mainstream adoption.
Related: Is Robinhood’s tokenized stock really going to take over the world?
Hard to even imagine, there is already an established path that involves traditional payment service providers (PSP) that integrate crypto and enable users to top up a mastercard directly from onchain liquidity. This hybrid approach combines the efficiency and programmability of digital assets with the global reach of familiar payment networks, making it easier than using crypto in real life. It’s not about choosing tradfi or defi, it’s about synthesizing both To create the user experience that people want and need.
People must send their digital assets to a public key on their debit card and then put their cryptocurrencies to use anywhere they would normally have a mastercard. It may not sound like it, and in many ways it is not. However, by bridging the gap between relatively niche digital assets and mainstream financial service providers, there is a real opportunity to both grow and provide access to finance to the billions of people that Tradfi is underdeveloped and underserved.
The focus on the use case is wrong
Over the last 16 years, a multi-trillion-dollar asset class has been created from nothing; However, only a small percentage is used in the real economy. Even then, its use cases are focused Remittanceswith a small portion applied beyond cold storage or speculation. This lack of utility is mainly due to closed systems built from mistrust between members of the Defi and tradfi community that prevent popular cryptocurrencies from fulfilling their potential.
By connecting digital assets to Tradfi, previous barriers that prevented people from using their assets are removed. Debit cards linked to digital assets can connect to existing PSP channels and unleash their true potential. Although this may seem far-fetched, previous technological leaps have occurred in shorter periods of time when usability issues were resolved. Data silos, walled walls and unnecessary mistrust of past vested interests need to be set aside in the future Web3 economy.
Throwing aside these ideological differences, Defi and Tradfi can achieve much more than they currently do. Through greater coordinated collaboration with existing infrastructure partners, service providers can accelerate the development of new products in the payments industry, improve existing architecture and scale faster while reducing costs for billions of underserved people.
It should not be a zero-sum game between opposing sides. Working together and using the existing infrastructure, both sides can break down barriers and achieve greater mutual benefit for all.
For too long, crypto evangelists have created complex systems within closed environments in response to tradfi failures. These pioneers achieved great things financially and technologically.
It’s time to put aside the ideological differences that prevent mainstream adoption.
Opinion by: Mark Jones, founder of Hana Wallet.
This article is for general informational purposes and is not intended to be and should not be construed as legal or investment advice. The views, thoughts, and opinions expressed herein are those of the author alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.
