Tradfi

Tradfi, short for "Traditional Finance," refers to the conventional financial systems and institutions that have been in place for centuries, including banks, stock exchanges, insurance companies, and regulatory bodies. Tradfi encompasses established financial practices, products, and services, such as savings accounts, loans, bonds, equities, and derivatives. Unlike decentralized finance (DeFi), which operates on blockchain technology with open, permissionless protocols, Tradfi functions within regulated frameworks and centralized structures, governed by laws and oversight from authorities like central banks and financial regulators.

Tradfi has long been the backbone of the global financial system, providing essential services for consumers, businesses, and governments. It includes a wide range of financial instruments and services that facilitate economic activity, from issuing debt and equity to enabling payments and currency exchange. While Tradfi is deeply rooted in traditional financial infrastructure, it is also evolving with the adoption of digital technologies, such as online banking, digital payments, and fintech innovations. However, Tradfi remains largely centralized, with intermediaries controlling access to financial services.