Original Author: Token Dispatch and Thejaswini M A
Original Compilation: Block unicorn
Preface
There comes a moment in every industry when rivals suddenly realize they are fighting the wrong war.
In the financial realm, this moment quietly arrived in 2025, not through a grand announcement, but through a series of seemingly unrelated corporate initiatives, signaling a profound transformation: the end of the confrontation between Traditional Finance (TradFi) and Decentralized Finance (DeFi).
For years, these two financial ecosystems operated like parallel universes. Traditional Finance (TradFi) lived in a world of T+2 settlement, banking hours, and regulatory compliance.
Decentralized Finance (DeFi) existed in the realm of instant settlement, 24/7 operation, and permissionless innovation. They spoke different languages, followed different principles, and viewed each other with mutual suspicion.
We all know about that acquisition frenzy:
Ripple → Hidden Road: $1.25 billion (April 2025)
Stripe → Bridge: $1.1 billion (February 2025)
Robinhood → Bitstamp: $200 million (June 2024)
But something fundamental has changed. Rigid boundaries are melting, not because either side won an ideological battle, but because both finally understand what they were missing.
Transformation
Kraken announced they will soon launch tokenized versions of Apple, Tesla, and Nvidia stocks—backed 1:1 by actual held stocks—and trade them 24/7 on the Solana blockchain.
Not crypto derivatives. Not synthetic exposure. Real stocks, just freed from traditional market time constraints.
This declaration laid the groundwork.
Consider this. Apple generates revenue every second from App Store purchases in Tokyo, iCloud subscriptions in London, and iPhone sales in Sydney. Yet, stocks representing this globally, 24/7 operating company can only be traded during a narrow waking window in Manhattan.
Kraken's xStocks—developed in collaboration with Backed and issued as SPL tokens on Solana—do not solve this problem through clever financial engineering. They solve it by completely eliminating the problem. Same stocks, same regulatory protection, same underlying ownership. Just programmable.
Its impact goes far beyond extended trading hours. These tokenized stocks can be used as collateral in DeFi protocols, combined with other assets in automated strategies, and instantly transferred across borders. Traditional brokerages require separate accounts, different compliance processes, and settlement delays. Blockchain infrastructure eliminates these friction points while retaining the core value proposition of stock ownership.
But the particularly important reason is: Kraken's target is not crypto enthusiasts wanting to trade Tesla stocks at 3 AM. Their target is institutional and retail investors outside the US, facing expensive, slow, and limited US stock market thresholds.
This is how the TradFi-DeFi bridge actually works. Not cryptocurrencies trying to replace traditional assets, but blockchain infrastructure extending traditional assets beyond their traditional limitations. This is just the beginning.
Starting from fierce competition, now we've arrived here, with banks joining forces to create stablecoins:
This convergence is accelerating, beyond individual company initiatives.
Compared to banks' tentative, isolated experiments in the crypto space over the past few years, this is a strategic shift. They are no longer competing individually in unfamiliar territory but pooling resources to build shared infrastructure, challenging existing stablecoin leaders.
[The translation continues in the same manner for the rest of the text, maintaining the specified translation rules for specific terms.]The 'FIT 21' Act and proposed stablecoin legislation provide clarity for institutions to operate in both worlds. The difference lies in how companies handle compliance.
The clearest regulatory momentum signal comes from White House Crypto Affairs Director David Sacks, who told CNBC in an interview that the 'GENIUS' Act stablecoin legislation could unleash massive institutional demand:
"We already have over $200 billion in stablecoins—just unregulated. I think if we provide legal clarity and a legal framework for this, we can almost overnight create trillions of dollars of demand for our Treasuries, which is very fast."
Data supports Sacks' optimism. Tether alone holds nearly $120 billion in US Treasuries, making it the 19th largest global holder—surpassing Germany. The GENIUS Act passed a key procedural vote with bipartisan support of 66 to 32, requiring stablecoins to be fully backed by US Treasuries or dollar equivalents.
Instead of building crypto-native systems and hoping regulators adapt, they are designing blockchain platforms with institutional compliance from day one.
This regulatory easing explains why major banks suddenly feel comfortable with tokenization projects. They are embracing programmable infrastructure using blockchain technology—not just cryptocurrencies.
User Experience Revolution
Traditional finance has already made people accept unnecessary blockchain technology restrictions. Since blockchain transactions take only seconds, why do international wire transfers take three working days?
Why should markets close when global demand operates 24/7?
Why do different financial services require different accounts, platforms, and compliance processes? The convergence of Traditional Finance (TradFi) and Decentralized Finance (DeFi) is not just about institutional adoption or technological innovation—it's about building financial infrastructure that truly serves user needs, not limited by traditional constraints.
When Kraken offers 24/7 trading of tokenized stocks, they're not just adding a product feature. They're showing how broad possibilities become when you no longer accept artificial constraints as permanent reality.
This convergence is particularly powerful because it creates a positive feedback loop.
As more traditional assets move to blockchain rails, these networks increase in value for everyone. As more institutions participate in DeFi protocols, these protocols become more stable and liquid.
These network effects explain why convergence is accelerating rather than slowly evolving. Early movers are not just gaining first-mover advantages—they're helping create standards and infrastructure that everyone else must adopt.
Tokenization of real-world assets is the most direct manifestation of this convergence. When Boston Consulting Group and Ripple predict the tokenization market could reach $18.9 trillion by 2033, they're describing the infrastructure of a post-tribal financial system.
Our Perspective
The great financial reconciliation of 2025 represents more than just technological convergence. It's a victory of pragmatism over ideology.
For years, the TradFi versus DeFi debate has been like watching two groups argue about different issues.
Traditional finance focuses on scale, compliance, and stability. DeFi prioritizes innovation, accessibility, and efficiency. Both are correct about what they value, but also incomplete. Breakthrough happens when companies stop trying to prove one method superior and start building systems that combine the best of both.
Ripple's acquisition of Hidden Road isn't to prove cryptocurrency's superiority—they're doing it because hybrid infrastructure creates more value than any single approach. This pragmatic convergence is exactly what the financial industry needs. Traditional finance lacking innovation is becoming increasingly obsolete.
DeFi without institutional adoption remains a niche market resource. But if smartly combined, they can create something single methods cannot: an efficient, accessible, compliant, and globally scalable financial infrastructure. Companies winning this convergence are those building the best bridges.
They understand that the future belongs neither to TradFi nor DeFi, but to companies that can eliminate friction between people's needs and available tools.
This great financial reconciliation is about building a system where both sides can leverage their best strengths while making their limitations irrelevant. Based on the infrastructure being built today, this future is coming faster than either side's ideological home expected.
