Avalanche (AVAX) Will Modernize Legacy RTGS Systems

According to an X post, business development expert Olivia Vande Woude remarks that Avalanche will improve current offerings for mainstream finance.

Crypto Price Alert: Avalanche (AVAX) price has gained nearly 8% over the last day driven by a broader crypto market rebound and rising institutional adoption for Avalanche.

The U.S. Securities and Exchange Commission’s approval of options trading for Ethereum spot ETFs has also tipped bullish chatter around the network.

At the same time, a well-known crypto expert has highlighted how the blockchain network is carving a niche for itself in the traditional finance domain.

According to a post by business development expert Olivia Vande Woude, the network will be instrumental in upgrading current offerings for mainstream finance.

Highlighting the lowest hanging fruit for AVAX, Woude says that the blockchain will help in upgrading legacy RTGS systems and post-trade infrastructure.

"Avalanche will improve current offerings for mainstream finance. The lowest hanging fruit is upgrading legacy RTGS systems and post-trade infrastructure," said Woude.

"Rather than a wholesale replacement, an Avalanche integration will enhance existing rails and offerings. For example, SWIFT, Fedwire, and CLS all face pressure to innovate but are struggling to launch new offerings quickly enough.

"Instead of a new messaging protocol, they'll gain real-time finality and liquidity efficiency with the network, and in post-trade infrastructure, there's a huge opportunity to streamline and fragment post-trade reconciliation.

"This will be particularly useful in emerging markets where institutions currently use multiple platforms for trade processing and reporting, leading to inefficiencies and difficulties in reconciling balances and transactions."

Highlighting the changes in large exchange infrastructure following an Avalanche integration, Woude adds that the integration will also help in reducing slippage for legacy exchanges as CBOE and ICE grapple with execution latency.

"Central clearing houses and exchanges are also moving quickly to offer more products and services, but they're facing challenges in terms of latency and slippage," Woude said.

"Avalanche's decentralization can help to reduce slippage and improve execution speed, which will be particularly useful for derivatives products, which often have higher latency and slippage than other types of products.

"Essentially, Avalanche does for finance what fiber optics did for telecom—it's replacing outdated rails with real-time, high-throughput, low-latency execution."

Woude further adds that the tamper-proof infrastructure of the blockchain network will help in upgrading the batch processing systems employed by traditional custodians.

The derivatives markets will receive their fair share of changes, relying on the blockchain's collateral optimization and margin logic based on advanced smart contracts, rendering them more efficient and transparent than traditional models.

"Institutions can launch new revenue streams with tokenized funds and products, which will be particularly useful in emerging markets, where financial institutions are looking for new ways to generate income and expand their market reach," Woude said.

"The U.S. administration is pushing to open the door wider for U.S. institutions to engage in tokenized instruments and participate in this fast-moving Web3 ecosystem.

"At the same time, the SEC is likely to approve options trading for Ethereum spot ETFs, which will open up new opportunities for institutions to invest in cryptocurrencies.

"Avalanche can offer financial institutions permission chains for compliance and on-chain derivatives mirroring ETF performance, providing institutions with even greater flexibility and efficiency."

Highlighting the benefits of an integration in short-term funding markets by relying on its dynamic discounting, Woude adds that the blockchain offers programmable yield analytics designed to revolutionize the operations of repo settlements and liquidity management in funding markets.

An EVM compatibility will allow institutions to still deploy Ethereum-based smart contracts, smoothening the curve for tokenized funds.