Traditional Banking vs. Blockchain

Traditional Banking vs. Blockchain

Traditional banking and blockchain both allow money to move, but they operate in very different ways.

Traditional banking is a centralized system. Banks hold custody of funds, validate transactions, and set rules, hours, and limits. Each operation depends on intermediaries and the country’s financial infrastructure.

Blockchain, by contrast, is a decentralized network. Transactions are recorded on a distributed digital ledger and do not require a central authority. Users can maintain direct control of their assets through a digital wallet.

Key Differences

• Intermediation: Banking relies on institutions; blockchain operates through a distributed network.
• Control: In banking, the bank holds custody of funds. In blockchain, users can control their own digital assets.
• Speed and Reach: Bank transfers, especially international ones, can take days. On blockchain, transactions can be completed in minutes and without borders.
• Access: Banking requires documentation and approval. Blockchain only requires an internet connection and a digital wallet.

In essence, traditional banking is based on institutional trust; blockchain is based on technology and cryptography.

Updated on: 23/02/2026