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If we had to select the single most important crypto-related event of the last year, a majority might point to Donald Trump’s successful reelection bid, which triggered a surge in Bitcoin and most other major tokens.
Others may point to Bitcoin’s halving in April or the launch of more than 10 spot Bitcoin ETFs following their approval by the SEC in early 2024.
Less flashy, yet equally significant developments like a substantial growth in stablecoins adoption strengthen the industry’s foundation.
This adoption also helped facilitate a more robust DeFi (decentralized finance) ecosystem while improving its connectivity with TradFi (traditional finance).
With crypto maintaining its momentum in 2025, it will take more than just an expanded stablecoin adoption to fuel DeFi-TradFi collaboration.
DeFi’s progress paves the way for TradFi
While many eagerly await Trump’s plan for a presumably crypto-friendly regulatory framework, it’s clear that the industry built off 2023’s late momentum continues to expand and introduce new technologies.
This demonstrates resilience regardless of the administration in power.
Several headlines and developments shared the spotlight in the busy year, pointing to a productive industry trending in the right direction.
Numerous key advancements are pushing the industry forward, from captivating new AI (artificial intelligence) applications to the explosion of tokenized RWAs (real-world assets).
Even memecoins and NFTs (non-fungible tokens) had their moments in 2024, further demonstrating the stability of a once-maligned sector.
Despite all this and Bitcoin surpassing the $100,000 mark, crypto remains a volatile asset class largely disconnected from TradFi institutions, ultimately limiting its full potential.
With that said, crypto’s momentum and DeFi’s achievements offer a great opportunity to accelerate TradFi involvement in 2025.
DeFi’s markedly advanced maturation and growth stand out above all. It continued to push the boundaries of blockchain by expanding ecosystem-wide integrations while innovating financial tools for a growing user base.
Among DeFi’s highlights were advancements in liquid staking, restaking and RWA tokenization developments that only begin to scratch the surface of its enormous potential.
There’s no reason to believe that its innovation will slow down or that interest in DeFi has peaked.
And as retail and institutional investors seek ways to gain exposure to ascending digital assets and engage with DeFi systems, TradFi will no longer be able to stay away.
It’s a well-known fact that TradFi has long wanted to play a more significant role within crypto.
However, regulatory and privacy considerations have limited its participation to private blockchain pilots and peripheral engagement with DeFi.
So, what will make 2025 the year TradFi plays a more active role in crypto?
Aligning TradFi and DeFi interests
Again, assumptions about the potential positive impact of Trump’s crypto regulations positive impact or how it will affect TradFi’s participation within DeFi can’t be made.
Instead, hope can be found in the growing trend of DeFi protocols opting to self-regulate by implementing KYC (know-your-customer) and AML (anti-money laundering) processes.
In 2025, this self-regulating trend is likely to continue, making DeFi safer for both retail and institutional investors.
This will further boost investor confidence and encourage participation, incentivizing TradFi to play a larger role.
DeFi’s growing acceptance of these basic regulatory measures demonstrates its maturity and understanding that customer safeguards will lead to wider adoption.
This would be possible thanks to increased institutional cooperation and acceptance of TradFi processes that can streamline this process.
The financial landscape is changing before our eyes. Neobanks are expanding their influence by providing customers with technology-driven solutions to improve the user experience.
Institutions have invested heavily in researching blockchain use cases and dedicated significant resources to develop their own initiatives geared toward providing digital asset services while boosting their balance sheets.
All this points to a centuries-old financial system that is undergoing rapid infrastructural changes.
Ultimately, both TradFi and DeFi are realizing that this changing landscape has room for two competing financial models to coexist.
Crypto has shown its staying power while TradFi remains a necessary gateway to economic activity for most people.
In 2025, this recognition will continue to manifest itself as these financial systems inch closer.
As the DeFi ecosystem evolves, going from trading and staking platforms to offering a broad range of services and tools, the sector will continue to provide an on-ramp for once-illiquid assets.
TradFi’s vast resources and expertise in providing financial tools and services, on the other hand, can bolster DeFi’s progress.
This would mean that we will see the convergence of these two sectors reaching new heights as their trajectories cross.
With the infrastructure in place, rising investor interest and optimism about regulatory clarity, the table is set for meaningful collaboration opportunities in areas such as self-custody, real-world tokenization and other joint ventures.
Crypto has bounced back from a frigid winter that allowed the industry to reprioritize and focus on innovation and RWAs instead of superficial hype-driven trends.
The looming collision between TradFi and DeFi has been years in the making but in 2025, expect it to be replaced with meaningful collaborations that lead to real progress.
By working together, these two ecosystems can create a more inclusive and efficient global financial landscape.
Roy Mayer is the founder and CEO of Vixichain, a layer-one blockchain solving TradFi’s reluctance to interact with public blockchains. As an avid entrepreneur in the blockchain and crypto space, Roy has over a decade of experience leading successful projects in the banking and payments sector. He has a proven track record of raising capital and scaling organizations from the seed to success.
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