TradFi

TradFi is an abbreviation for traditional finance. It refers to the established financial systems and institutions that have been in place for decades, if not centuries. This includes entities like banks, insurance companies, stock exchanges, and brokerage firms. TradFi operates within a regulated framework, adhering to established laws, rules, and compliance procedures. Its core functions involve managing money, facilitating investments, providing loans, and ensuring the stability of financial markets. Transactions within TradFi are typically settled through intermediaries and often involve established payment networks. The infrastructure supporting TradFi is generally well-developed and has a long history of operation.

In contrast to emerging financial technologies, TradFi is characterized by its reliance on physical branches, paper-based processes, and legacy systems. While it has undergone digital transformation, its fundamental structures remain. TradFi plays a crucial role in the global economy by providing essential financial services to individuals, businesses, and governments. It is the system most people interact with daily for their banking needs, investments, and insurance. The stability and trustworthiness of TradFi are largely built upon its regulatory oversight and historical precedent.