The Future of Finance: Can Crypto Replace the Traditional System?

The first ever Crypto Week in the United States is drawing to a close. This year has been monumental for cryptocurrency, both in America and worldwide. In mid-June, the GENIUS Act received the approval of the Senate. Recently, along with two prominent House crypto bills—namely, the Clarity Act and the Anti-CBDC Surveillance State Act—it became the center of debate at the House of Representatives.

Discouraging news hit the crypto community on Tuesday: the vote blocked the three pieces of legislation, but after a second day of deliberations lasting over 10 hours, the GENIUS, the CLARITY and the Anti-CBDC Acts are all set to move forward. The GENIUS ACT has been signed into law by the President on Friday, while the CLARITY and the Anti-CBDC Acts are ready to pass a vote in the Senate.

Meanwhile, business and institutional adoption of cryptocurrency continues to grow. This heightening enthusiasm may raise questions as to the future of both crypto and traditional finance.

Vlad Tenev, CEO of Robinhood, has reportedly stated according to widely shared headlines that cryptocurrency will replace traditional finance. This bold prediction invites a deeper exploration: could crypto truly replace conventional financial systems—or are there fundamental limitations that will keep traditional finance firmly in place? This article examines both sides of the debate.

In Sum

• Crypto challenges traditional finance with decentralization, transparency and borderless innovation.
• Blockchain boosts efficiency through fast, low-cost transactions and emerging tech with applications besides cryptocurrency.
• Adoption barriers remain, including price volatility, limited usability and government resistance.
• A hybrid model is emerging, blending crypto’s innovation with the stability of traditional systems.

A Brief Overview of Traditional Finance and Money

Traditional finance as we know it today has evolved across millennia, from barter systems and the minting of the first coin to the current complex bank network and payment rails supporting the continuous flow of transactions worldwide. To call it “traditional” perhaps erases the rich history of continuous developments our current centralized financial system has undergone.

At the core of traditional finance lies cash—its form and usage have evolved over time, yet it consistently serves three fundamental functions. First, money is a medium of exchange, meaning it has a value recognized by its users in order to facilitate the trade of goods and services.

Second, money serves as a store of value, meaning that it has a durable value that remains stable over time, and which can be exchanged later for goods and services without significant loss of purchasing power.

Third, money is a unit of account, meaning it communicates the price and value of goods and services in such a way that it allows us to compare their relative worth, enabling prices to be quoted in a consistent manner.

Together, these three functions form the foundation of our financial system, where retail and central banks have become indispensable as cornerstones of community development around the globe, fostering economic growth and financial stability at the local and international level.

Ideologically, traditional financial institutions hold centralization and regulation as core principles at the centre of their activities—in their view, these bases are necessary in order to ensure the security and stability their users need. Yet, 1.4 billion in the world as of 2021 remained excluded, finding themselves unable to enjoy the benefits access to high quality banking services may provide.

On the other hand, those who are part of traditional financial systems can find themselves restricted by slow transaction settlements and high fees for international remittances among other barriers to financial freedom.

Moreover, traditional or centralized finance does not operate in a vacuum; its efficiency and inclusivity vary greatly depending on geography, governance and infrastructure. While residents in developed nations often enjoy seamless digital payments and credit access, those in emerging markets may instead rely on cash economies, informal lenders or mobile payment ecosystems that operate parallel to formal institutions.

This global disparity underscores a need to resolve the inefficiencies and inequities of traditional finance, while continued reliance on centralized authorities raises concerns around censorship, systemic risk and control over personal financial data.

A Brief Overview of Cryptocurrency

Cryptocurrency, by contrast, is a much more recent development in the long history of finance. It emerged not from governments or institutions, but from Satoshi Nakamoto—which is a pseudonym. In a 2008 whitepaper, Nakamoto outlined Bitcoin—a peer-to-peer digital currency designed to operate without banks, borders nor central authorities.

At the core of cryptocurrency lies a different vision of money—a paperless one, rooted in code, cryptography and decentralization. Transactions are validated not by trust in institutions, but by consensus across a distributed network. Ownership is recorded not in ledgers kept privately by banks, but on a public blockchain open to anyone.

Since Bitcoin, the cryptocurrency landscape has grown rapidly. Ethereum introduced programmable smart contracts, unlocking new possibilities for decentralized applications. Today, cryptocurrency underpins a broader ecosystem of innovation, including decentralized finance (DeFi), non-fungible tokens (NFTs) and digital governance models—all aiming to reimagine how value is exchanged and controlled in a world that is increasingly digitalizing.

Radical transparency and pseudonymity are at the heart of the crypto mission—but they also turn cryptocurrency into a double-edged sword. While the public nature of blockchain may deter illicit activity, the privacy it offers can just as well enable it.

The cryptocurrency community, at its root, is free market-oriented and anti-establishment. Engaging in cryptocurrency trading comes at a high risk, with, in turn, a chance of yielding high reward. On the other hand, traditional finance is about moderated risk under a regulatory framework, sacrificing some freedom for greater stability and greater security.

Whether or not cryptocurrency is able to fulfill the functions of money is subject of debate.

Could Crypto Replace Traditional Finance?

Traditional finance is the cumulation of millennia of historical and technological developments. Could crypto’s underlying technology, the blockchain, be the one to overhaul and replace TradFi?

The technology behind cryptocurrency, known as blockchain, is composed of blocks, each containing immutable transaction data, a timestamp and a reference to the previous block (hash). This chain of blocks is stored across multiple computers (called nodes) in a network, creating a distributed ledger that is shared among participants, in effect, democratizing access to information where in traditional finance, it is exclusive to institutions.

Blockchain as A General System Is More Secure

The decentralized nature of cryptocurrencies additionally enhances system security by nearly eliminating all single points of failure. As previously mentioned, in opposition to centralized financial systems—where a breach of a central authority can compromise the entire network—a blockchain relies on a distributed consensus among many participants (nodes). This makes it significantly harder for malicious actors to manipulate or bring down the system. Even if a hacker gains control over a single wallet or node, they cannot affect the integrity of the entire blockchain, as the network’s security depends on agreement across the majority of nodes.

Crypto and Blockchain Are More Efficient

The efficiency of blockchain is also celebrated by its proponents. Blockchain can process large amounts within seconds, whether locally or across borders. In comparison, the reach of traditional financial systems remains limited to set geographical boundaries as well as the laws that regulate them. Money sent to another country has to pass through the hands of many intermediaries like banks before reaching the intended recipient, each of them with their own set of fees to take into account.

Talks of adopting stablecoins as payment instruments have multiplied with the noise the GENIUS Act brought to the crypto community for the cost-efficiency and the speed at which stablecoins can be sent, highlighting current issues in the payments industry.

Crypto and Blockchain Are Decentralized

More than resolving performance issues in traditional finance, though, proponents of blockchain and cryptocurrency hold them as democratizing forces, with built-in accountability and independence from government intervention. Where government-issued currencies like the Canadian dollar (CAD) or the Argentinian peso (ARS) face devaluation at varying rates according to monetary policy, Bitcoin was built to be inflation free.

Proponents also argue that blockchain promotes global accessibility, as anyone with an Internet connection is able to transact at affordable rates, wherever they may be in the world. In comparison, billions of people live in areas with limited access to efficient banking infrastructure.

Crypto and Blockchain Have Many More Applications

Innovations in the blockchain space have also brought about a wide range of applications beyond simply trading cryptocurrency. From decentralized finance (DeFi) platforms that enable peer-to-peer lending and borrowing thanks to smart contracts, to non-fungible tokens (NFTs) that are revolutionizing digital ownership in art and entertainment, blockchain technology is being harnessed across different industries.

For instance, supply chain management has seen increased transparency through immutable ledgers, while identity verification and secure voting systems are gaining traction for their potential to enhance trust and reduce fraud. These diverse applications highlight blockchain’s transformative potential in reshaping how data, assets and trust are managed in the digital age.

Crypto Has the Potential to Function Like Money

According to proponents, cryptocurrency like bitcoins and stablecoins can act as a store of value in specific contexts. While bitcoin’s price is a lot more volatile on the day to day than traditional stores of value—which, as a reminder, refers to a stable value which can be exchanged at a later time without sacrificing significant purchasing power—bitcoin can serve as a store of value when kept as a longer term investment. Stablecoins, on the other hand, act as stores of value by virtue of them being tied to fiat currencies.

Cryptocurrency is increasingly being used to pay for goods and services online. In particular, stablecoins are expected to play a growing role as mediums of exchange. As major retailers such as Amazon and Walmart move toward accepting digital currencies, stablecoins—due to their price stability and ease of transaction—are likely to become commonly traded for everyday goods and services.

On the other hand, only stablecoins so far can serve as units of account due to their stability, but as other cryptocurrencies like bitcoins grow more stable in price, they have the potential to become units of account.

Why Couldn’t Crypto Replace Traditional Finance?

Governments View Crypto as A Threat

While Trump has actively been advancing and celebrating cryptocurrency even prior to the start of his second mandate, pushback against crypto from other governments can be expected—see, for example, China’s ban on crypto trading. Regulatory and legal hurdles favor the continued dominance of traditional finance.

With how striking and prevalent the anti-establishment message at the heart of the crypto community is, governments, regulators and institutions may view digital assets as a threat or a challenge to their authority. The desire to maintain monetary control may motivate resistance and even regulatory crackdown on virtual currencies, and indeed, many countries have restrictions on cryptocurrency trading or payments of varying degrees of limitations.

In response, some governments are exploring Central Bank Digital Currencies (CBDCs) as a way to offer the benefits of digital finance while retaining sovereign control over the monetary system, including, for example, the Chinese digital Yuan (e-CNY). Despite the ban on private ownership of cryptocurrency, Chinese people still buy cryptocurrencies—China has one of the largest populations of crypto owners in the world, second only to India.

In the Western hemisphere, the idea of implementing CBDCs is now fading with Trump vowing that during his presidency, a central bank digital currency would never be allowed, although the House of Representatives blocked anti-CBDC bills from moving forward on July 15, the second day of Crypto Week, before passing a successful vote the next day. Although bills in favour of cryptocurrency innovation and support constitute a significant evolution in the short history of cryptocurrency, they do not come without regulatory pushback.

General Public Remains Unsure About Crypto

Aside from governments perceiving cryptocurrency as threats towards states’ control of money, what the general population feels and thinks matters tremendously.

While crypto has been gaining unprecedented ground in 2025 with wider adoption and integration across industries, distrust brought on by scammers or even controversial business enterprises from President Trump remains. The average citizen—particularly those outside of tech-savvy or investment communities—remains wary, with many associating digital assets with volatility and speculative bubbles rather than with financial empowerment or stability.

At the same time, a lot of people don’t see much use for crypto in their everyday lives. Most digital assets aren’t yet part of how people shop, pay bills or send money to friends, for instance. Until using crypto becomes as simple and practical as using regular money, many will continue to see it as something experimental and on the fringes of society, rather than a real alternative to traditional currency.

While traditional financial services are integrated into every aspect of daily life, having earned acceptance worldwide, bitcoin and other virtual currencies have yet to reach that level of convenience and nearly-universal support. Furthermore, at the heart of cryptocurrency and blockchain lie complex technologies and financial concepts, presenting a steep learning curve for any new user.

Crypto Does Not Yet Function as Money

While some proponents argue that crypto is able to fulfill all the functions of money, others challenge the idea that cryptocurrency acts as a store of value and as a unit of account. Cryptocurrency is still too volatile to be considered a store of value according to many, acting only for now as an aspirational store of value.

The fact that the price of a bitcoin moves so substantially in the blink of an eye makes it a riskier investment than, say, a stablecoin, which is tied to a fiat currency.  It also means that it is possible to lose significant purchasing power when using it after acquisition, which runs contrary to the definition of a store of value.

Similarly, cryptocurrency prices are not stable enough currently to constitute a unit of account, which is when the value of one currency can be used to determine the value of goods or services compared to one another. All in all, cryptocurrencies have yet to prove they can fulfill all core financial functions, on one hand, undermining their credibility, and on the other, limiting their practical utility in everyday transactions and broader economic systems.

A Merge Between Traditional Finance and Cryptocurrency

While cryptocurrency holds great potential and promise, presenting innovative and powerful solutions to many prevalent issues within traditional finance, the chances of cryptocurrency dismantling the current system are extremely low. Rather, most proponents of cryptocurrency view a merge between the worlds of traditional finance and cryptocurrency as the best possible outcome.

Vlad Tenev speaks of cryptocurrency and blockchain as the “next stage of evolution”, with the underlying technology of decentralized finance revolutionizing the industry as a whole, doubling in efficiency and transparency. Combining the capability of blockchain with the trustworthiness traditional financial systems have earned over centuries among the general population can usher in a financial ecosystem that is not only more efficient and transparent, but also broadly trusted and widely adopted, bridging the gap between innovation and institutional reliability.

Major financial institutions like JPMorgan Chase have developed their own blockchain networks, and companies like PayPal and Visa are enabling crypto transactions on their platforms. These integrations demonstrate a clear trend: rather than being replaced, legacy systems are adapting and evolving by integrating blockchain innovations.

A question raised by the possibility of such interconnectedness between traditional finance and digital finance is whether or not this runs contrary to the core idea of decentralization at the origin of cryptocurrency. While it may appear to challenge the original ideals of decentralization, it can also be seen as a pragmatic evolution—where collaboration helps scale adoption, enhance stability and bring broader legitimacy to the crypto ecosystem without entirely abandoning its core principles.

EZO

EZO exists at the junction where decentralized finance meets centralized finance, bringing the best of both worlds together in our upcoming self-service app where our users will be able to swap cryptocurrencies and fiat currencies around the clock at competitive and transparent rates among many other features, including bill payments.

In the meantime, our OTC Desk is in service and fully licensed to operate in Canada. Meet with us to discuss your crypto needs.

‍

‍

Frequently Asked Questions

What Advantages Does Crypto Have Over Traditional Finance?

Blockchain-based digital assets known as cryptocurrencies enable faster settlement times and greater efficiency for large sums. The transparent nature of the blockchain additionally increases accountability, as everyone with an Internet connection is able to access and track transactions on public ledgers.

What Advantages Does Traditional Finance Have Over Crypto?

Traditional financial systems have a longstanding history, and as such, they have gained the trust of the general public. In addition, their payment rails and banking solutions are well-integrated into the everyday lives of their users.

Can Crypto Replace Traditional Finance?

While it is unlikely crypto will dismantle traditional banking, interconnectedness between traditional centralized finance and decentralized finance will enable a more seamless flow of capital, innovative financial services and enhanced accessibility, bringing to users worldwide greater overall  efficiency and possibilities.