- FreeBnk CEO explains how the integration of TradFi and DeFi changes the game.
- The platform offers direct Crypto2Stocks trades.
- FreBnk goes all in on RWA investments in real estate.
The integration of decentralized finance (DeFi) with traditional finance (TradFi) holds the promise of a more efficient and inclusive financial system. While still in its early stages, some institutions are already working on this integration.
One of them is FreeBnk, a hybrid institution that combines blockchain technology with traditional banking. Its CEO, Yunus Emre Ozkaya, spoke to DailyCoin about the technology’s potential to transform the financial system.
Integrating DeFi and TradFi: Banking 3.0
DeFi supporters have been vocal about its benefits compared to traditional finance, including speed, costs, and financial inclusion. However, financial institutions have been relatively slow in adapting to this trend.
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Not so with FreeBnk, a hybrid financial institution, whose goal is the integration of DeFi with tradFi. The bank has pioneered the concept of Banking 3.0, leveraging blockchain technology to improve the efficiency and accessibility of traditional banking services.
Its CEO, Yunus Emre Ozkaya explained to DailyCoin that the advantages of Banking 3.0 also include greater transparency and reduced costs. “DeFi allows users to access financial services without the need for intermediaries, leading to faster and cheaper transactions,” Ozkaya went on to say.
Ozkaya explains that Banking 3.0 “aims to create a seamless and inclusive financial ecosystem where users can easily transition between fiat and digital assets. For example,” he adds, “our Crypto2Stocks feature enables users to directly swap their cryptocurrencies for stocks in real time.”
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Another example is the bank’s FreePad launchpad for Initial Exchange Offerings (IEOs). Ozkaya illustrates that by allowing users to invest in new projects using fiat or cryptocurrency, the launchpad is “democratizing access to early-stage investments.”
Ozkaya claims that DeFi also promises opportunities for developers and investors to drive innovation, opening the way for a “more competitive and dynamic financial ecosystem.”
User Experience is Key in Making DeFi Go Mainstream
Developers and investors have so far been on at the forefront of DeFi adoption. Not so with users, who have been slow to adapt DeFi applications. This is largely because of the complexity of DeFi applications and the perceived risk involved, explains Ozkaya.
“Many potential users find these technologies difficult to understand and use,” Ozkaya shared with DailyCoin. “User experience plays a crucial role in overcoming these barriers”. To tackle these barriers, FreeBnk is aiming to make DeFi as simple and easy to understand as possible.
“We are focused on user-friendly design and comprehensive educational resources,” Ozkaya explained. With better design, education, and security measures, “we can make these technologies more accessible and appealing to a broader audience.”
To further help make crypto accessible, FreeBnk offers omnichain transactions with zero gas fees. Thanks to collaborations with several blockchain networks, the bank can absorb gas fees and offer a better experience to users.
RWAs Are the Future of Real Estate Investing
A key area that has risen to prominence in 2024, in which DeFi can enhance traditional finance, is tokenized Real-World Assets (RWAs), which is also part of FreeBnk’s offering. “Tokenized investing allows for fractional ownership of assets,” Ozkaya explains, which makes investing accessible.
This is especially important for assets such as real estate, where high upfront costs present a barrier to investors with less capital. “This democratization of investment opportunities, Ozkaya continues, “can lead to higher liquidity and the potential for diversified portfolios”.
According to Ozkaya, RWAs also “streamline property management” and reduce the administrative burden by making ownership transfers seamless.
However, there are also challenges with the model. As token holders don’t directly control the properties, there is a need for “robust property management systems to ensure transparency and accountability,” Ozkaya explains. Regulatory compliance is another challenge of the model.
Regulation Continues to Be the Main Challenge for DeFi
In both crypto and DeFi, regulation has been a major risk factor and roadblock for adoption. This is especially true for services that resemble traditional banking. Crypto firms in the United States, in particular, have been hit by a series of lawsuits, and the agency is only now slightly changing its approach.
Ozkaya acknowledges that navigating regulations is challenging. “We prioritize compliance by working closely with legal experts and regulators” Ozkaya explained to DailyCoin. This includes anti-money laundering (AML) and know-your-customer (KYC) regulations.
However, Ozkaya is confident that a blend of DeFi and tradFi can comply even with the most stringent regulations. “Our hybrid model allows us to leverage the best practices from both traditional finance and crypto,” he explains, “ensuring a secure and compliant platform for our users.”
Read more about FreeBnk:
FreeBnk Token Launches on WhiteBIT, Expanding its Reach
Read more about DeFi:
What Is DeFi? Uncovering the Mysteries of Decentralized Finance
