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Insights and Expertise

On-chain transfers – speeds vary by network) and final once signed, deliv-
ering unmatched reliability compared to traditional
the shift traditional banking, where cross-border payments can take days
or weeks and may still be canceled or reversed after
delays.
finance can't ignore • Highly secure networks: Blockchain networks lever-

age advanced cryptographic techniques and decen-
tralized architecture, making them highly secure,
antifragile and robust, unlike traditional systems that
rely on centralized points of vulnerability.
• Regulatory progress: While the regulatory landscape
on digital assets is still highly fragmented, major
markets have now established, or are actively in the
By David Unsdorfer process of establishing, clearer frameworks, reducing
Clear Junction uncertainty and encouraging institutional adoption.
• Diverse assets for varying needs: Amid growing
s the spotlight on crypto grows and intensifies, global uncertainty and multi-polarity, blockchain's de-
it's not just speculative crypto assets and flashy centralized nature has attracted financial institutions
digital tokens like memecoins commanding and other market participants to adopt a diverse range
A attention. A quieter but more profound shift of digital assets for varying needs – from Bitcoin as a
is happening with on-chain transfers. These transactions, form of "digital gold," stablecoins for seamless global
which occur directly on a blockchain network rather than payments, and tokenized assets for enhanced liquid-
through traditional financial systems, are gaining serious ity and investment opportunities.
traction globally, especially the use of stablecoins (a type
of digital asset pegged to and backed by fiat currencies). Stablecoins are a major part of driving this shift. Once
For banks, fintechs and payment service providers (PSPs), tools for crypto traders, they are increasingly now rec-
ignoring this shift is no longer an option. ognized as serious financial instruments with global rel-
evance, offering a compelling proposition: faster and final
From niche to necessity settlement, lower fees, transparent ledgers and always-on
Stablecoin transfers hit an astonishing $27 trillion in 2024 availability.
(see https://visaonchainanalytics.com/transactions). That's
more than Visa and Mastercard's combined transaction In emerging markets, they unlock seamless access to
volume. And this figure is poised for explosive growth as U.S. dollars for businesses and individuals bypassing the
banks, corporations and individuals deepen their grasp of hurdles of traditional banking and foreign exchange. For
digital assets and refine their own adoption strategies. So, remittances, gig worker payments and business liquidity,
what does all this mean for traditional financial players? they're redefining the boundaries of financial possibility
with speed and efficiency.
Long dismissed as the playground of tech enthusiasts and Why traditional finance can't compete
crypto anarchists, blockchain has matured significantly
since Bitcoin's inception 16 years ago, evolving to encom- What we're seeing with the growth of on-chain transfers
pass a wide range of crypto assets supporting varied use isn't about ideological disruption anymore. It's about per-
cases. formance. The traditional financial system, built on legacy
infrastructure and batch settlement, simply can't compete
For financial institutions and PSPs, the growth of stable- with the speed, efficiency and programmability of public
coins in particular signifies a continuing shift toward de- blockchain networks. The benefits are clear:
centralized finance (defi) as a mainstream and dependable • Faster, cheaper cross-border payments: Traditional
alternative to traditional systems. Institutions that have systems rely on multiple intermediaries, high fees and
been engaging or experimenting with on-chain transfers slow processing times. On-chain transfers cut through
like stablecoin payments will likely have discovered the these inefficiencies, offering near-instant transactions
following: with low fees and settlement finality.
• Lower transaction costs: While there are numerous • New revenue streams: Blockchain technology opens
public blockchain networks available, and selecting avenues for banks and fintechs to offer an exciting
the right one is an important factor, transaction fees and broad spectrum of value-added services, such as
are generally very low, especially when compared to tokenized asset management, smart contract-based
the costs of cross-border payments through tradition- lending, and real-time settlement solutions. These in-
al banking systems. novations can attract new customer segments while
• Near-instantaneous and final transactions: Block- retaining existing ones.
chain transactions are near-instantaneous (though • Improved compliance and transparency: Block-

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