A Citi executive has warned that the crypto industry’s fragmented system architecture could repeat the inefficiencies of traditional banking.
The executive pointed out that the current crypto market contains numerous incompatible on-chain systems, clearing mechanisms, and liquidity pools. This fragmentation leads to capital inefficiency and accumulating systemic risk. Traditional banking took decades of consolidation to build relatively efficient clearing systems, and the crypto industry may face a similar consolidation process.
This perspective echoes calls within the industry for unified standards and interoperability protocols.