subject: Understanding What TradFi Is: Explaining Traditional Finance [print this page]
What is TradFi? TradFi stands for Traditional Finance. It refers to the usual financial system that has been around for a long time. This includes banks, credit unions, insurance companies, and other traditional financial businesses. These follow rules set by governments and finance authorities.
How Finance Has Changed: From Traditional to Digital As technology gets better, finance changes a lot. Things like cryptocurrency, DeFi (Decentralized Finance), AI (Artificial Intelligence), Machine Learning, IoT (Internet of Things), and Blockchain have changed how we use financial services.
TradFi (Traditional Finance) refers to the conventional financial system, including banks, stock markets, and regulated institutions. It operates under strict government oversight, ensuring stability and security. Transactions in TradFi rely on intermediaries like banks and brokers, making processes slower and sometimes costly. While it offers consumer protection and regulatory compliance, accessibility can be limited due to geographic and financial barriers. TradFi contrasts with DeFi (Decentralized Finance), which eliminates intermediaries using blockchain technology. Despite the rise of DeFi, TradFi remains essential for global economies, providing structured financial services like loans, investments, and banking with established legal frameworks.
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