The digital asset ecosystem is gearing up amid the Trump Administration’s embrace of blockchain technology and the recognition that digital is the future of all financial services, including securities. At least initially, back office services were in many respects the most obvious uses of distributed ledger tech, as much of finance remains rooted in its analog roots.
Today, Fintech OG Mike Cagney, founder of Figure and SoFi, shares on X something that many are “going to hate.”
Cagney is a proven visionary in Fintech. In just a few years, he created multi-billion dollar companies, so bet against him at your own risk. Cagney hammers old financial services, especially the rails on which it operates today, predicting the potential demise of some establishment entities:
“What blockchain really does is eliminate the need for Visa. Visa exists to intermediate transactions: provide fraud/chargeback protection, standardize acceptance, etc. Public blockchain native stablecoin transactions eliminate most of the need for what Visa does. The paradox here is that the processes blockchain disintermediates ARE VISA’s PRODUCTS. Again, this is extensible to DTCC, Nasdaq, etc.,” he explains.
A student of the obvious, Cagney notes that “TradFi” makes money by intermediation. Blockchain is the “great disintermediary.”
“We shouldn’t be thinking marginal change of TradFi but wholesale replacement on DeFi.”
Now, don’t count old finance out. They are great at lobbying policymakers and creating regulatory moats to protect what they have. They are already making moves to adopt blockchain tech, and it would not be surprising if some of them took nascent competition out. If you can’t beat ’em, join ’em. This is a classic innovator’s dilemma. Do you protect what you have and commit Seppuku? Some probably will.
You cannot underestimate the transformative transition taking place in the financial services sector today, something the last administration oddly denied. The current administration is embracing change and has hammered the accelerator.