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TradFi Meaning

TradFi, short for Traditional Finance, refers to the established financial system built around centralized institutions such as banks, brokerages, exchanges, asset managers, and clearing houses. It includes conventional instruments like equities, bonds, derivatives, and fiat currencies, governed by regulatory frameworks and intermediaries.

TradFi relies heavily on trusted third parties to handle custody, settlement, compliance, and risk management. While this structure provides legal clarity and consumer protections, it often results in slower settlement cycles, higher costs, and limited transparency compared to blockchain-based systems.

In crypto markets, TradFi is increasingly intersecting with decentralized finance (DeFi) through products such as ETFs, tokenized securities, and institutional custody solutions, creating hybrid market structures.

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