The New Financial Stack's Architecture
Modern finance effectively runs on three parallel infrastructure layers. Maragkos Petros explains how the institutional layer, the fintech distribution layer, and onchain protocols each handle custody, liquidity, and settlement differently. This model provides a clear framework for understanding how new technologies are integrating with—and sometimes replacing—traditional banking systems.
The institutional layer, traditionally reliant on batch processing and correspondent banking networks, is being re-architected around API-first principles. This shift enables modularity, allowing components like payment processing, risk scoring, and settlement to be developed and scaled independently. Financial institutions are increasingly adopting distributed systems to handle exponential growth in transaction volumes, with some reporting throughput increases of 64% compared to centralized architectures. At the fintech distribution layer, the focus is on abstracting away the complexity of the underlying institutional rails. API-driven platforms utilize event-driven architectures and high-throughput streaming to achieve millisecond latency for real-time payments and fraud detection. This allows for rapid iteration and the embedding of financial services into non-financial applications, a trend known as embedded finance. Onchain protocols introduce a new settlement layer where transactions are finalized in seconds, a stark contrast to the multi-day settlement times of traditional systems. Stablecoins have become a key component of this layer, processing an estimated $9 trillion in genuine economic transactions in 2025. This efficiency is pushing major financial players like JPMorgan and Visa to integrate blockchain-based settlement into their infrastructure for cross-border payments and tokenized assets. The integration of these layers is creating a hybrid financial system. Major banks are now developing "tokenized deposits," which are on-chain representations of bank liabilities, combining blockchain's liquidity with the legal standing of traditional deposits. Projects are underway to ensure interoperability between these new on-chain assets and existing permissioned bank chains, aiming for 24/7 settlement without the need for intermediaries like SWIFT. This architectural evolution is forcing a new approach to custody. For onchain assets, custody is no longer just about secure storage but about integrating cryptographic key management directly into transaction workflows. Institutional-grade custody now involves multi-layer key protection and API-first infrastructure to automate and secure high-volume transaction flows across different blockchains. The shift to this multi-layered architecture is fundamentally a response to the demands of a 24/7 global economy that legacy systems were not designed for. The ultimate goal is to create a more transparent, efficient, and interoperable financial system. This requires a move from monolithic, siloed systems to a more decentralized and interconnected network of services.
