Why is connecting the middle layer between banks and blockchain more valuable than the two ends?
Author: Bryan Daugherty Article Compilation: Block Unicorn Original Title: Who Gets Value in Web 2.5? For most of financial history, it was the transfer of funds that was the difficult point. The challenge is how to pay the funds from point A to point B, which requires going through a series of banks, each of which draws commissions. Sometimes, this even involves transferring funds across borders. Over the past decade, cryptocurrencies and stablecoins have promised to minimize these frictions through crypto apps and wallets. But if these funds can't be used in the broader economic system, then these quick, low-cost transfers are meaningless. The dollar value stuck in a crypto wallet is less than its actual value. Because of this, cryptocurrencies are now playing the role of a more complete infrastructure for transferring existing traditional assets. The integration of old and new financial systems has given birth to a new middle layer, and it is in this layer that value is accumulated. In today's post, I'll explore who is seizing value in this new layer. The need for Web 2.5 For over a decade, the cryptocurrency industry has been trying to convince people to download wallets, set up assets between different blockchains, and store funds in new applications. But people don't abandon systems they've been familiar with and used for decades just to try something new. No vendor wants to accept payments via blockchain and then watch the money lie in their wallets, waiting for them to find a way to exchange it back into a bank account they can use for everyday expenses. Transferring funds from your wallet to your bank account is subject to processing fees and, in most cases, compliance checks. The problem has never been the ability of cryptocurrencies to transfer funds in seconds, but rather its architecture requires people to abandon the systems they already use, such as bank accounts, credit cards, and payroll systems, and use a completely new system. Access points, exit points, and bridging solutions are all friction points that need to be hidden, not features to show off. People are always embracing new technology that makes it faster and cheaper to transfer the funds they already have into their existing accounts. The ideal infrastructure is cryptocurrency as an efficient, invisible enabler and the underlying carrier of traditional finance. We call this optimal state “Web 2.5.” While this term may sound obscene, the idea behind it is to balance the best of both. We've preserved the essence of traditional finance, such as regulation, licensing, verification, and the user interface and user experience that people already trust and use. We then combined that with the low-cost, programmable, and always-on payment methods brought about by cryptocurrency. The two don't need to replace each other. Banks are still banks, and cryptocurrencies are injecting new life into infrastructure that used to be slow-moving and obsolete. But if cryptocurrency becomes an invisible underlayer, and traditional finance is still a familiar surface, where does value accumulate in the new world of Web 2.5? The layer that connects the two major financial systems has historically been worth more than most institutions to which it is connected. Visa's operating profit last year (fiscal year ending September 2025) was as high as $24 billion, while its network's processing fee for each transaction was less than 1%. Even so, its operating margin is still as high as 60%. Depository Trust and Settlement Corporation (DTCC), which is currently building its own on-chain settlement system, processed securities transactions worth $4.7 trillion in 2025 and made a profit of $2.9 billion. Both middle tier institutions are now building a conversion layer that enables banks to convert ISO 20022 instructions to on-chain settlement while retaining their infrastructure. On June 23, Chainlink and a consortium of more than 50 European and South Korean banks (with total assets of around $10 trillion) announced the launch of the Pangea project to test real-time settlement of foreign exchange transactions. The goal is to transition the foreign exchange settlement infrastructure from a traditional T+2 cycle to a real-time T+0 model. Chainlink's Runtime Environment (CRE) acts as an orchestration layer to connect blockchains and other external payment systems without manual routing or bridging. It converts every regular instruction into an on-chain atomic exchange and returns the results to the banking system for reading. Chainlink is a relatively new technology. However, DTCC, which has a 50-year history and is located in the center of the US market (which handled approximately $4.7 trillion in securities transactions last year) chose the same Chainlink runtime for...
