TradFi

TradFi, short for Traditional Finance, refers to the conventional financial system that includes banks, stock markets, insurance companies, and regulatory institutions.

What TradFi Covers

TradFi encompasses everything from retail and investment banking to centralized exchanges, credit systems, and government-issued currencies. It operates under well-established regulatory frameworks and relies on intermediaries for transactions, custody, and trust. Unlike DeFi, it’s heavily regulated and generally slower to adopt emerging technologies.

Why TradFi Is Still Relevant

Despite the rise of crypto and decentralized finance, TradFi remains the backbone of the global economy. It provides stability, legal protections, and wide accessibility. Understanding TradFi is crucial for comparing it with DeFi, as the two systems often intersect, especially when crypto platforms seek integration with real-world financial services.