Ten years of bank neglect, what is the cost to the global economy?

Disclaimer: This article reflects opinion analysis and does not represent the stance of the editorial team.

Financial institutions and large banks have had a full decade to explore the potential applications of cryptography in cross-border and interbank settlements. They could have launched pilot programs, accumulated technological expertise, and designed compliance frameworks, ready to go to market as soon as regulators approved. But in reality, most institutions chose to do nothing.

The cost of this choice is being paid by the global economy—slow remittance chains, high intermediary costs, and idle capital locked within systems. These “invisible frictions” are eroding billions of dollars in economic benefits every day.

The Low-Efficiency Tax of Traditional Finance

The traditional banking system is riddled with structural inefficiencies: securities settlement requires queuing, banks have fixed cut-off times, and foreign exchange trading still quotes over multiple days. These delays seem like technical issues but are actually covert taxes on global capital.

Every additional day funds stay in intermediary accounts represents an opportunity cost—money that could have been invested in startups, earned returns, or compounded in other markets. For example, retail cross-border payments from Brazil to the US or Europe often require routing through offshore banks (often in the Caribbean) before reaching the destination accounts. Each additional intermediary layer adds fees, extends processing times, and complicates compliance.

For retail users, this directly translates into higher remittance costs; for businesses, liquidity is hampered, and capital efficiency declines. There is a fundamental economic principle: the inefficiency of payment systems is ultimately reflected in spreads and fees—just as risk in credit markets translates into interest rates. Banks are aware of this but allow the system to remain inefficient.

Blockchain Is Redefining Financial Rules

Revolution in Settlement Speed

Blockchain technology reduces settlement times from days to minutes or even seconds. In traditional private equity or venture capital, investors wait 10-20 years for liquidity, whereas in token economies, assets are often unlocked faster and can circulate freely on global exchanges, OTC markets, and DeFi platforms.

More interestingly, even when tokens are still in lock-up periods, they can be staked for yield or used as collateral in structured operations—meaning value in Web3 is never truly “idle.”

While traditional bonds pay coupons semi-annually and private credit distributes interest monthly, on-chain yields accrue every few seconds, block by block. This is not just about speed but a redefinition of the entire liquidity premium concept—when assets can be partially unlocked or re-mortgaged in real-time, the discount for illiquidity gradually diminishes.

Efficiency in Risk Management

In traditional finance, adding margin may take days because collateral must pass through multiple layers of custodians and clearinghouses. In decentralized finance, collateral can move instantly. In October 2025, the crypto market experienced the largest nominal liquidation event in history, with on-chain ecosystems settling billions of dollars in a matter of hours through automated processes—efficiency validated even during black swan events like Terra.

Emerging Markets Bear the Greatest Impact

Developing countries are paying a heavy price for the inefficiencies of traditional finance.

In Brazil, local bank accounts cannot hold foreign currency directly; all international payments must go through foreign exchange conversions. Even more complex, Latin American FX often relies on USD as an intermediary settlement currency—converting BRL(BRL) to CLP(CLP) involves two steps: BRL→USD→CLP, each incurring spreads and delays. Blockchain stablecoins enable direct on-chain settlement of BRL and CLP, bypassing intermediaries entirely.

Even more absurd are time constraints. Brazil’s T+0 (same-day) FX operations must close between 12 PM and 1 PM local time, and T+1 transactions have a cutoff around 4 PM. Missing these windows incurs extra costs and delays. For companies operating across time zones, real-time settlement in traditional systems is nearly impossible. Blockchain operates 24/7, eliminating this constraint altogether.

These are issues that banks should have addressed years ago. Notably, the difficulties in cross-border payments like USD conversions in Brazil are not due to regulatory resistance (Brazil’s crypto policies are more lenient than the US), but purely due to financial institutions’ complacency.

Technological Risks Will Gradually Fade

At the turn of the new millennium, analysts often included “internet risk” in valuation models, fearing infrastructure failures. Twenty years later, no valuation model still includes this—because the internet has become assumed infrastructure, and a single outage can cause billions in losses without being priced as risk.

Blockchain will follow a similar evolution. By 2030, pricing “smart contract risk” in business models will seem as outdated as today’s pricing of “email risk.” Once security audit standards, insurance mechanisms, and redundancy frameworks mature, perceptions will shift: blockchain will no longer be seen as a source of risk but as a risk buffer layer.

Time Is Cost

The financial world has long regarded waiting as a risk—and rightly so. Blockchain minimizes this risk by compressing transaction and settlement windows. The ability to instantly release and reallocate capital represents a paradigm shift.

Yet, banks unnecessarily deprive clients of these benefits. Cases like JPMorgan’s Onyx (now renamed Kinexys) demonstrate that institutional-grade blockchain settlement is entirely feasible, but these remain isolated examples and are far from industry standards. When regulatory barriers are eventually removed, the industry should roll out ready-to-go production solutions—but what we see now is a void.

This delay is causing the global economy to lose billions due to unnecessary frictions. In a world where time equals benefits, every day of delay adds to the bill. Until financial institutions, payment companies, and service providers fully adopt blockchain settlement, this cost will only continue to grow.