## A Decade of Bank Waste, at the Cost of the Global Economy

Financial institutions have had enough time to change the game, but they chose to do nothing.

For over a decade, blockchain technology has proven its capabilities in cross-border settlement. There have been opportunities to build pilot projects, reserve specialized talent, and design compliance frameworks—everything was ready, awaiting regulatory approval. Yet most banks and payment companies turned a blind eye, still relying on slow and inefficient systems, causing the global economy to waste billions of dollars every year.

A few pioneers, like JPMorgan's Kinexys project, have demonstrated that institutional-grade blockchain settlement is entirely feasible. But these are isolated cases and far from becoming industry standards. As regulatory windows gradually open, the industry should have launched ready-to-go commercial solutions. Now, this delay is accumulating daily, and the bill keeps growing.

## How High Are the Hidden Costs of Today’s Financial System

Every delay in the traditional financial system is an invisible tax on capital.

Settlement queues, bank cutoff times, foreign exchange transactions—these processes still operate over multiple days. Funds sit idle in intermediary accounts, which could be used for financing, growth, or compound investments, but are locked in time. Take Brazil as an example: retail cross-border remittances often need to go through offshore branches (usually in the Caribbean) before reaching the US, Europe, or other Latin American countries. Each additional step adds more cost, time, and compliance complexity.

For individual users, this translates into higher fees; for businesses, it severely hampers liquidity and capital efficiency. In finance, inefficiency is ultimately reflected in spreads and fees—this is how the system operates. Banks are well aware of this logic but have missed the opportunity to simplify the system.

## How Blockchain Disrupts Liquidity Logic

Emerging financial technologies are rewriting the way capital flows.

In traditional private equity and venture capital, investors often wait 10 to 20 years for liquidity. In the crypto ecosystem, tokens are usually unlocked within shorter cycles and can then be freely traded on global exchanges, OTC desks, or DeFi platforms. Interestingly, even when tokens are still locked, they can be staked to generate yields or used as collateral in structured operations.

This means that value which would be idle in traditional finance continues to circulate on-chain. The so-called "liquidity premium" (the extra return investors demand for holding illiquid assets) is gradually eroding.

The fixed income market is also experiencing this shift. Traditional bonds pay semi-annual coupons, private credit pays monthly interest, while on-chain yields accrue every few seconds. In traditional systems, meeting margin calls takes days (collateral must go through custodians and clearinghouses), but in DeFi, collateral can be moved instantly. During the largest nominal liquidation event in crypto by October 2025, the on-chain ecosystem settled billions of dollars in just a few hours.

## How Absurd Are the Costs of USD Exchange in Emerging Markets

Developing countries bear the brunt of this inefficient system.

Take Brazil as an example: local bank accounts cannot hold foreign currencies directly. This means any international payment automatically involves a currency exchange step. Worse, exchange pairs in Latin America often require going through the US dollar as an intermediary. Converting BRL to CLP, for instance, involves two steps: BRL→USD, then USD→CLP. Each step adds spread and delay.

In contrast, blockchain enables BRL and CLP stablecoins to settle directly on-chain—simple, direct, and low-cost.

The traditional system also imposes strict trading cutoff times. FX operations in Brazil on the same day (T+0) must be completed between noon and 1 pm; missing this window incurs additional spreads. Even T+1 transactions face a late-afternoon cutoff around 4 pm. For companies operating across time zones, real-time settlement within this framework is impossible. Because blockchain operates 24/7, these restrictions are eliminated.

These are issues banks should have addressed years ago. Notably, Brazil does not face the strict crypto regulatory resistance from legislators that the US does—these problems still exist, with no excuse.

## When "Waiting" Is No Longer a Cost of Risk

The financial world has long viewed waiting as a risk, and that logic is not wrong. Blockchain minimizes this risk by shortening the time gap between transaction and settlement; instant capital release and redistribution represent a paradigm shift.

Twenty years ago, the internet was also priced as a "risk." During the dot-com bubble, analysts often included an "internet risk" factor in their models, concerned that online infrastructure might fail. Twenty years later, no valuation model still prices this risk—because the internet has become infrastructure.

Blockchain will undergo a similar evolution. By 2030, pricing "smart contract risk" in business models will be as outdated as pricing "email risk" today. Once security audits, insurance standards, and redundancy frameworks mature, the default assumption will flip: blockchain will no longer be seen as a risk but as an infrastructure that mitigates risk.

## The Final Bill

Until banks, payment companies, and financial service providers truly adopt blockchain-based settlement, the global economy will continue paying the price for this complacency. In a world where time equals profit, this bill grows every day.