Re-examining Crypto Trading: A New Take on the Liquidity Revolution Under Traditional TradFi Systems
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Re-examining Crypto Trading: A New Take on the Liquidity Revolution Under Traditional TradFi Systems
The integration of digital transactions with traditional banking may well be the optimal long-term solution for cross-border compliant transactions.
Navigating Web3 tides with focused insightsIn an era of accelerating global integration, cross-border payments have undoubtedly become the lifeblood of international trade, remittances, and commercial operations. However, traditional financial systems are struggling to meet the demands of a rapidly digitizing world, facing numerous challenges. On one hand, high transaction costs deter many businesses and individuals, adding to the burden of global economic activity; on the other hand, prolonged settlement times severely impact capital flow efficiency, significantly constraining the pace of commercial operations. Additionally, complex regulatory barriers introduce uncertainty into cross-border payments, hindering smooth international trade.
A long-term perspective is essential. As global trade demand expands rapidly, the market urgently requires more flexible, cost-effective, and technologically advanced solutions. In this context, cryptocurrency-based cross-border payment methods have naturally emerged, holding the potential to completely disrupt traditional models and bring transformative change to modern international trade.
Challenges of Traditional Cross-Border Payments
In traditional cross-border payments, the involvement of multiple intermediary banks leads to a cumbersome, multi-step process, potentially extending settlement times to several days (T+N). In today’s environment where real-time transactions are becoming standard, this results in significant inefficiency.
Moreover, each intermediary bank involved charges fees, substantially increasing the total cost for senders. These delays and expenses are nearly unbearable for businesses reliant on timely payments to manage cash flow effectively, as well as for individuals sending money to family members across borders.
Furthermore, the diverse and complex regulatory environments across jurisdictions pose additional challenges. The involvement of multiple intermediary banks worldwide introduces further complications, while unpredictable exchange rate fluctuations during lengthy transaction periods exacerbate these difficulties.
In summary, the interbank payment processes within traditional finance suffer from multiple issues. There is an urgent market need for innovative solutions that offer faster, more cost-effective, and reliable cross-border payment options to support the speed and scale of global trade.
Digital Assets: Transforming Global Financial Transactions
In the context of accelerating global integration, cross-border payments have become vital to international trade, remittances, and business operations—digital assets and blockchain technology are increasingly seen as viable solutions to address these challenges.
Firstly, by enabling real-time settlements and eliminating the need for intermediaries, blockchain-based payments significantly reduce transaction costs and improve overall efficiency in cross-border transactions—not only reducing delays but also addressing the complexity and high costs associated with traditional financial systems, making cross-border payments more accessible and reliable for both businesses and individuals.
As clearly shown in the chart above, digital assets hold a distinct advantage over traditional payment systems in terms of cost and speed. By processing payments directly between parties, they eliminate reliance on intermediaries, dramatically lowering transaction fees and saving substantial costs.
Additionally, they enable near-instantaneous cross-border transfers—a significant improvement compared to traditional systems involving multiple correspondent banks, where clearing and settlement can take several days.
More notably, digital assets enhance financial inclusion by providing financial services in regions where traditional banking infrastructure is limited or absent—particularly benefiting emerging markets. This convenience and efficiency make digital assets an increasingly attractive option for both businesses and individuals.
Great changes often start small. Digitally driven cross-border payment solutions are already disrupting traditional channels by offering faster, cheaper, and more secure alternatives for international transactions.
The Emerging Landscape of Digital Payments
For this reason, at recent events such as Money20/20, cross-border payments have become a central topic of discussion, with industry leaders focusing on the challenges and opportunities presented by this evolving landscape.
Cross-border transaction complexities are particularly pronounced in emerging markets such as Asia. By 2023, digital wallet usage is expected to account for over 58% of all digital payment transactions. Despite rapid adoption of digital innovation, Payoneer Managing Director Jody Perla emphasized that cross-border transactions remain complex and costly, highlighting the urgent need for continuous improvements in payment methods to meet the demands of modern global trade.
As these trends evolve, more payment companies are viewing digital payments as an effective solution. For example, PayPal Ventures has invested in Mesh, a digital payment startup, signaling growing recognition of digital assets as a transformative force in financial services. Amman Bhasin, Partner at PayPal Ventures, articulated this vision: "As the financial services landscape undergoes rapid transformation, we believe user ownership and portability of assets will become foundational to product innovation, and digital assets will be the first beachhead in achieving this."
The World Bank also recognizes the growing application of digital assets—such as stablecoins—in addressing challenges within existing monetary systems, especially in emerging markets and developing economies (EMDEs). These digital assets are seen as key tools for enhancing financial inclusion and improving cross-border payment efficiency in areas lacking traditional financial infrastructure.
Stablecoins, which are pegged to stable assets like the U.S. dollar, play a crucial role in mitigating risks related to currency volatility, ensuring stable transaction value and making them more reliable for businesses and individuals.
Stablecoin adoption is evident across several key metrics: as of May 2024, there were over 27.5 million active users, reflecting a 50% year-on-year increase in transaction volume. Additionally, approximately 30% of global remittances are now facilitated through stablecoins. This growing acceptance underscores a broader trend of businesses and consumers increasingly turning to digital-driven solutions to overcome the inefficiencies and limitations of traditional cross-border payment systems.
As the financial landscape continues to evolve, digital assets are poised to play an increasingly critical role in shaping the future of cross-border settlements and global finance.
Bridging the Gap Between Traditional and Digital: OSL Over-the-Counter Services
OSL, a licensed and compliant digital asset service provider based in Hong Kong, stands at the forefront of this historic technological shift, committed to seamlessly integrating the strengths of digital currencies with traditional methods by bridging digital assets and traditional banking systems.
Its over-the-counter (OTC) trading service serves as a key offering, distinguished by strong banking relationships—especially close collaboration with major Hong Kong banks—that enable significantly compressed settlement times, a critical advantage in digital finance:
Unlike traditional financial systems where cross-border transactions may take days, OSL leverages advanced blockchain technology and banking networks to achieve near-instant settlement.
This speed is crucial for institutional clients needing to execute large-scale transactions quickly across different markets, ensuring fast and secure movement of funds globally. At the same time, OSL adheres to strict KYC (Know Your Customer) and AML (Anti-Money Laundering) standards, adding an extra layer of security and trust.
Notably, while speed is foundational to OSL's OTC service, it is far from its only advantage. As one of only two licensed exchanges currently operating in Hong Kong, OSL has set new industry benchmarks in regulatory compliance and security—having consistently operated a regulated exchange with comprehensive insurance coverage. OSL holds SOC 2 Type 2 certification and undergoes regular audits by reputable accounting firms, ensuring the highest level of client asset protection.
Meanwhile, OSL’s OTC service offers deep liquidity, enabling seamless execution of large-volume trades with minimal friction. Supported by its advanced REST API and Request-for-Quote (RFQ) system, it provides multiple trading options, allowing clients to trade efficiently and receive guaranteed pricing—eliminating the risk of price slippage commonly encountered on traditional exchanges.
Additionally, OSL’s tailored customer service and strategic global partnerships enable it to meet the evolving needs of its diverse client base across major markets worldwide.
As the digital economy continues to grow, the role of digital payments in revolutionizing financial transactions becomes increasingly prominent—especially as demand for speed, security, and efficiency in cross-border transfers rises. Digital assets are poised to become a cornerstone of global financial infrastructure.
Innovators leading this transformation must integrate the characteristics of both traditional finance and digital transactions. OSL’s OTC service exemplifies this approach by seamlessly combining the advantages of digital assets with the reliability of traditional banking, delivering fast, secure, and compliant solutions that empower clients to thrive in the dynamic digital economy.
The future is here. The convergence of traditional finance and digital transactions may inject new vitality into the global financial system.
*Note: The views and opinions expressed in this article are those of the author and do not necessarily reflect the views or positions of OSL Group Limited or its affiliates. Any forecasts and opinions contained herein are provided solely as general market commentary and do not constitute securities or investment offers, solicitations, advice, investment recommendations, or guarantees of returns. Information, forecasts, and opinions are accurate as of the date of this article and are subject to change without notice. They should not be regarded as advice or recommendations regarding any investment product or market.
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