The Future of Finance: How TradFi Will Integrate Public Blockchains, Insights from FG Nexus CEO

Maja Vujinovic, CEO of FG Nexus, explains how TradFi will have to adapt to blockchain

Across the globe, financial systems are quietly witnessing one of the most significant disruptions seen in decades. Payments, settlements, and custody services are progressively being reconstructed on programmable, blockchain-based infrastructure. Interestingly, this shift is being led not just by crypto startups, but also by major institutions.

Key Takeaways

Financial systems are transitioning to blockchain technology, driven by significant institutions.
The merging of traditional finance (TradFi) and blockchain is expected to reduce costs and enhance efficiency while creating new market structures.
Public blockchains, such as Ethereum, will play a key role in this evolution, promoting transparency and interoperability.
Companies are already implementing programmable finance solutions, transforming how businesses and individuals handle transactions.
Regulatory clarity is necessary to further enable the adoption of tokenized assets and other blockchain technologies.

In a recent interview with crypto.news, Maja Vujinovic, CEO and Co-Founder of Digital Assets FG Nexus, shared insights on the ongoing integration of blockchain in traditional finance.

The Merge of Blockchains and TradFi

Crypto.news: You’ve previously mentioned that blockchain and TradFi are on a collision course. What led you to this belief?

Maja Vujinovic: My journey began in the early 2000s with mobile payments in Africa when it was a nascent concept. I witnessed multinational firms enter markets eager to harness mobile payment technology. During this time—despite the skepticism from friends in Europe and the US—I realized there was a genuine need for such innovations.

Reading the Bitcoin whitepaper crystallized my understanding of peer-to-peer systems. At GE, using Ethereum smart contracts in pilot programs unveiled to me the potential for blockchain to transform payments, trades, and deposits into programmable financial instruments. Now institutions realize they can leverage shared ledgers to move cash, collateral, and data, integrating blockchain seamlessly into their operations.

Meaningful Changes Ahead

What impactful changes do you foresee as these companies adopt blockchain technologies? Will it purely come down to efficiency, or do you think we’ll see structural changes in the market?

Excellent question. Broadly speaking, blockchain technology consolidates payments, settlements, and clearing into streamlined processes, for instance, transactions using USDC which could also carry additional functionalities like interest tokens.

While efficiency—such as faster settlements, reduced costs, and fewer intermediaries—is important, trust is even more crucial, particularly for sectors like aviation and healthcare.

The real transformation will be structural. Programmable transactions can create entirely new markets with fresh collateral types and user interactions in finance. Thus, while costs might decrease, the way money is perceived and transferred will undergo significant change.

New Markets on the Horizon

Can you share specific examples of new markets emerging from this technology?

In the corporate realm, we already see tangible developments. At GE, we piloted on-chain treasury functions, which are becoming mainstream. For example, multinational corporations can now seamlessly convert idle cash into tokenized T-bills without intermediaries.

We previously utilized programmable payments for aviation parts, where entire payment processes—from escrow releases to accounting updates—were automated. These strategies are now operational at scale.

Transformations for Retail Users

What kind of advancements can retail consumers expect?

Retail users are seeing shifts in access and ownership. Fractional ownership of assets, like real estate or bonds, is now attainable, which wasn't feasible before. Demand for these opportunities is increasing.

Imagine stablecoins in your wallet gaining automatic yields through investment in tokenized T-bills—passively enhancing savings.

Commerce is also evolving; a consumer buying a car could have payments directly split among the seller, manufacturer, and tax authority with total transparency and no intermediaries.

Most significantly, we're beginning to deliver institutional-grade financial tools to individual users, thus bridging the gap between Wall Street and Main Street.

Impacts on Market Dynamics

Do you think this technology will lower barriers for new fintech companies, or will it lead to consolidation?

That’s a valid observation. We're entering what I refer to as a "schizophrenic" environment where both trends are occurring simultaneously.

On one hand, yes, new entrants face lower barriers. Today’s fintechs can directly connect to tokenized markets through APIs, avoiding traditional banking infrastructure and legacy systems. This democratizes innovation.

On the flip side, the efficiencies benefitting smaller players also encourage consolidation at the infrastructure level. Value moving on-chain prioritizes trust, regulation, and the depth of liquidity.

Thus, although we’ll see many new fintechs emerge, they will likely rely on a limited number of robust, regulated programmable networks, like Ethereum or Avalanche.

Public vs. Private Blockchains

In your opinion, will the settlement layer be based on public blockchains like Ethereum, or will private, bank-led systems dominate?

This is a pivotal debate. I genuinely believe we will see a hybrid model emerge.

Public chains like Ethereum will hold the liquidity anchor due to their transparency and global reach. In contrast, permissioned and bank-led networks will manage regulated assets, but these will not remain isolated. They will increasingly need to connect to public chains for liquidity and growth.

I envision an interconnected ecosystem where banks must engage with these open systems to thrive.

Role of Regulation

What regulatory changes are necessary to unlock the full potential of blockchain technology?

A clear legal framework for tokenized assets and ledger-based ownership is essential. Without this clarity, firms remain cautious about integrating significant portions of their balance sheets on-chain.

We also need rules for settlement finality and ledger interoperability to prevent operating in disconnected silos.

An essential element is creating a balanced framework for non-bank entities. Clear guidelines for custody, KYC, and access to the financial system should be established.

Moreover, guidelines regarding liquidity are crucial. We need mechanisms to foster active secondary markets for tokenized assets.

Supporting Regulatory Sandboxes

Do you support the regulatory "sandbox" approach? Is it the right way forward?

Absolutely. Sandboxes play a critical role by allowing experimentation in a safe environment. However, they shouldn’t be the final stage of development.

It’s crucial to have pathways for full regulation beyond the sandbox to ensure continuous innovation. Countries like Singapore and Switzerland are setting good examples by building regulatory frameworks that extend beyond mere experimentation.

Ethereum's Growing Appeal

Given the recent surge of treasuries allocating to Ethereum, what factors contribute to its increasing attraction?

From my experience, Ethereum’s programmability and capacity for yielding returns set it apart from Bitcoin, making it appealing for corporations seeking dynamic financial assets.

Ethereum offers exposure to tokenized assets, stablecoins, and the world of DeFi, positioning it as more than a passive investment. It has been effectively marketed and adopted by institutions as the backbone of digital finance, which builds more interest.

The Future of Stablecoins and Sovereign Currencies

How does the rise of dollar-backed stablecoins affect the future of sovereign currencies?

Japan’s recent move to establish a stablecoin framework indicates a shift in recognition of the impact of stablecoins like USDT and USDC. Other governments are realizing that without proactive measures, they may lose control of certain aspects of their monetary policy.

While some nations may embrace dollar stablecoins, particularly those with unstable currencies, others will reinforce their monetary sovereignty. The resulting ecosystem will likely include a blend of private and public stable currencies.

This complex landscape shows that private dollar coins are changing local economies and creating a hybrid global financial system.

Future Trends to Watch

Before we conclude, what are some key trends to anticipate?

Several trends stand out, including advancements in AI, blockchain interoperability, and energy management. Energy will play a crucial role in our digital and physical systems and will be central to ongoing discussions about infrastructure and governance.

Current market distractions may overshadow these critical conversations, but foundational shifts are on the horizon, with energy at their core.

This transformation will demand our attention as we navigate the evolving landscape of finance and technology.