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The combination of TradFi and cryptocurrency has sparked many ideas into discussions regarding the future of the financial industry. This article provides a deep insight into TradFi’s role in the cryptocurrency space by exploring its functions, strengths, and challenges it faces with decentralized finance (DeFi) and centralized finance (CeFi).<h2 id="header-0">What is TradFi?</h2>TradFi, the short form of traditional finance, refers to the traditional financial system consisting of banks, government-issued currencies (fiat money), stock exchanges, and regulated financial institutions. These entities follow rules, policies, and regulatory measures, aiming to enhance investors and promote financial stability.While TradFi uses intermediaries like banks, brokerages, or even regulatory bodies, the cryptocurrency space applies decentralization and peer-to-peer transactions as an alternative.<h2 id="header-1">Functions of TradFi</h2>TradFi serves several critical functions that sustain the global economy:Capital Allocation: Banks and financial institutions act as middlemen and help in the process of lending and borrowing of capital. They assist the companies in financing through loans, bonds, and share sales.Wealth Management: Tradfi offers services like investment portfolios, retirement planning, and savings accounts among others. These services help individuals and organisations to accumulate and build up their capital assets.Payment System: The traditional financial system provides a safe and secure method for transactions, especially cross-border transactions. Money transfers, credit and debit cards, use of bank accounts can be made effective with this method.Risk Management:  TradFi offers several ways of dealing with financial risks, including insurance, hedging, and future contracts. These services play a pivotal role in minimizing and managing losses that could be incurred.Regulation and Oversight: Financial regulations in TradFi guarantee safe, transparent, and secure operations, ensuring stability within the financial market.<a href="https://cryptotale.org/tradfi-and-crypto-exploring-strengths-and-challenges/" rel="noopener noreferrer nofollow">Read more on Cryptotale.</a>Visit the links for more information <a href="https://cryptotale.org/" rel="noopener noreferrer nofollow">Website</a> | <a href="https://twitter.com/cryptotalemedia" rel="noopener noreferrer nofollow">Twitter </a>| <a href="https://t.me/cryptotale_news" rel="noopener noreferrer nofollow">Telegram </a>| <a href="https://www.instagram.com/cryptotalenews/" rel="noopener noreferrer nofollow">Instagram </a>|

TradFi and Crypto: Exploring Strengths and Challenges

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