The Banking Executive Issue - October 2025 Issue

Onchain Finance In Arab Countries transactions. This shift empowers users with greater control over assets, transparency through public ledgers, and inclusion for the unbanked. However, onchain finance also faces challenges such as regulatory uncer- tainty, scalability, and user educa- tion, making it a complementary, rather than replacement, model for the evolving financial ecosystem. the BANKING EXECUTIVE 76 ISSUE 202 OCTOBER 2025 ONCHAIN FINANCE VERSUS TRADITIONAL FINANCE Infrastructure Trust Mechanism Transparency Accessibility Speed & Settlement Cost Efficiency Security Risks Regulatory Clarity Innovation Potential User Experience Built on decentralized blockchain networks Trustless via smart contracts and public ledgers High: all transactions are publicly verifiable Global and open to anyone with internet access Near-instant settlement via smart contracts Lower fees due to reduced intermediaries Vulnerable to smart contract bugs and protocol exploits Often unclear or evolving High: programmable money, DeFi, tokenization, cross-chain interoperability Can be complex and technical Centralized institutions (banks, clearinghouses, regulators) Trust-based via intermediaries and legal frameworks Limited: records are private and controlled by institutions Restricted by geography, documentation, and institutional gatekeeping Often delayed due to manual processes and intermediaries Higher fees from banks, brokers, and service providers Vulnerable to institutional fraud, data breaches, and systemic failures Well-established and jurisdiction-specific Moderate: innovation constrained by legacy systems and regulatory inertia Familiar and user-friendly for most consumers Onchain Finance Traditional Finance