Blockchain Will Transform Financial Foundations: When Will DeFi and TradFi Become One?

How much longer will financial institutions continue to distinguish between traditional capital markets and decentralized solutions? According to Sidney Powell, co-founder and CEO of Maple Finance, the answer is: not for long. In the next few years, the industry will witness a fundamental transformation where blockchain becomes an integral part of global financial operations, and the line between DeFi and TradFi will effectively disappear.

Blockchain as the Next Layer of Financial System Technology

Powell points out that blockchain will play a role in the global financial markets similar to what the internet took over in retail. It won’t be just an exchange, but an evolution—a new technological layer upon which transactions will be based worldwide. Instead of traditional registration systems, most operations in capital markets will be settled and cleared through public blockchain ledgers, laying the foundation for a new financial order.

Cryptocurrencies as the New Infrastructure of Capital Markets

This transformation won’t only affect how transactions are reported. Blockchain will enable a completely new ecosystem of financial products. Debt markets will naturally adopt structures based on cryptocurrencies—bitcoin-collateralized loans, asset-backed securities linked to crypto loans, and even crypto-based credit cards. These new instruments will be easily securitized and distributed across capital markets, removing existing technical and operational barriers.

Implications for Market Participants

The shift to blockchain won’t be a matter of choice but an inevitable consequence of technological progress. Institutions that currently see DeFi as an alien reality will soon realize that the same technology invalidates their previous categorical divisions. Blockchain is to finance what the internet is to communication—a universal, decentralized infrastructure upon which the future of capital markets will be built. This perspective is no longer science fiction but a natural evolution of financial systems, as observed by industry leaders like Powell.

Information sourced from Odaily and CoinDesk