Bringing TradFi Regulation to the Crypto Industry

In finance today, there are two main sectors: traditional finance (TradFi) and decentralized finance (DeFi), each playing fundamentally opposing roles in their own space. Until recently, after the establishment of bridging solutions and innovations like Bitcoin exchange-traded funds (ETFs), these two spaces were completely separate.

The gap divided TradFi and DeFi so significantly that once the chasm had been crossed, there still remained one global hurdle: regulations. 

Regulatory oversight and legislation have mainly been built around TradFi for many years and despite the now-established bridge to DeFi, regulations are still catching up. Due to a lack of familiarity with cryptocurrencies and tokenized assets, there is still a long way to go as regulators steadily grasp the concept and potential of the crypto industry.

Fortunately, the crossroads where TradFi meets DeFi presents a substantial opportunity for TradFi platforms to bring innovation to the crypto industry. With platforms like Multibank Group bringing its regulatory expertise and worldwide presence to DeFi, regulatory hurdles are quickly falling away.

Regulatory Comprehension

Regulations only govern what has preceded them, rarely established in preparation for future events. As such, the regulatory framework already present has staggered behind crypto innovation as the industry growth outpaced regulators. This delay in regulatory oversight has created a fragmentation in regulations that can drastically vary from jurisdiction to jurisdiction.

The stark differences in regulations from location to location can quickly give rise to compliance issues and leave both innovators and regulators scratching their heads in confusion. This complexity is still worsened, and many new startups in the crypto industry suffer as a result of a lack of regulatory comprehension and preparation common in TradFi institutions. 

When crypto platforms without TradFi regulatory experience enter the space and regulators without DeFi regulatory experience greet them: something similar to a comedy ensues, except there’s no laughs at the end. This lack of understanding on both sides can limit, completely halt, or entirely crumble what could be new benchmarks of industrial excellence — simply due to a lack of regulatory expertise.

Building Bridges That Last

TradFi institutions that have entered the crypto industry like MultiBank Group through its innovative platform MultiBank.io, mark not just an expansion but a compliant bridge that will last. By carrying a wealth of experience in regulatory understanding and compliance, platforms like MultiBankGroup — established way back in 2005 — deliver the regulatory excellence needed to ensure crypto can thrive.

MultiBank Group was already one of the largest financial derivatives institutions globally with more than 12 regulatory licenses and over a million customers before expanding into the crypto industry through MutliBank.io. This level of preparedness ensures that the regulatory bridge is built strong and built to last — creating a more sturdy regulatory foundation upon which crypto can innovate.

It’s not just about how to walk the walk, it’s about how to talk the talk. Platforms like MultiBank bring a huge advantage over companies unfamiliar with TradFi — regulatory lingo. When communicating with regulators, trusted TradFi entities like MultiBank Group, with its compliant history and renowned reputation, turn the regulatory discussion from a battlefield to a breeze.

By bringing long-established credibility into the crypto industry, companies like MultiBank make life for regulators far easier with the security and transparency needed for future-thinking regulatory necessity. In an industry where credibility has been hit hard by failures like the FTX collapse, MultiBank.io offers a salve for wounded regulatory trust.

Regulations for the Future

As TradFi platforms and institutions steadily enter the crypto industry, regulators also steadily become increasingly more at ease as the development of practical and effective regulation becomes possible. 

With firms like MultiBank Group bringing years of experience in regulatory compliance, common vital concepts like anti-money laundering (AML), know your customer (KYC) and regulations that govern data protection come easily. Using this knowhow as a base and MultiBank.io as an expansion into crypto, the firm and regulators are able to establish balanced innovation and security.

An example of this can be seen clearly by the acquiring and pre-approval of regulatory compliance across multiple jurisdictions to serve towards global TradFi and crypto industry stability. Having pursued a Virtual Asset Regulatory Autohirty (VARA) license further illustrates the commitment MultiBank has towards aligning regulatory clarity with the future of crypto.

Overcoming the Trust Barrier

When it comes to any and all financial dealings, whether that be between individuals, companies, corporations, or entirely different financial systems — trust is the foundation needed for long-term success and functionality. This trust has been, unfortunately, eroded over the years in the crypto industry by bad actors and malicious dealings associated with crypto. 

This, however, is not reflective at all of the innovation of the crypto industry and DeFi, and has created negative perceptions of crypto for regulators and regulatory entities over the years. To address this issue, platforms like MultiBank.io have been created, to deliver reputation and an unblemished history into a space marred by misfortune and misperception.

TradFi entities like MultiBank Group can bring a level of reputation and industry excellence into the crypto space to help establish trust with both regulators and the entire industry itself. Through unyielding high standards of security and transparency with regulators, MultiBank is overcoming this trust barrier.

What’s Next?

As TradFi institutions like MultiBank Group continue to enter the crypto industry and establish regulatory certainty for the entire DeFi space, the gap is slowly closing. With its regulatory expertise and global compliance measures already in place, innovation in the crypto industry can be freed of regulatory limitations.

Creating a basis of common pathways for regulatory communication and establishment, MultiBank Group is creating a layer of trust and guidance for crypto regulation of the future.