As price action baffles market makers and traders, Experts in the cryptocurrency industry reached an agreement on several important points last week. In particular, centralized finance (CeFi) and decentralized finance (DeFi) can co-exist, and a “mix” of financial products and services will be available to users in the future.
On Jan. 19, Cointelegraph moderated the panel discussion, “Can CeFi and DeFi Coexist?” for the Global Blockchain Business Council. In the video, Panelists discuss questions related to adoption, banking the unbanked, and whether innovation means disruption to traditional financial services.
Highlights included the need for more education and transparency in the cryptocurrency space, while financial inclusion could be achieved through smooth onboarding techniques and clear regulation. Popular blockchains such as Solana and the Bitcoin Lightning Network emerged, as well as DeFi protocols, including Uniswap.
In terms of education, Mary Beth Buchanan, President of the Americas and Chief Legal Officer of Crypto Intelligence and Risk at Merkle Science, commented:
“Many people are not being served in traditional finance. The winner in the disruption race will be the project that has the ability to reach those in the community who are not currently accessing DeFi, and there has to be education.”
Ambre Soubiran, CEO of digital asset data provider Kaiko, agreed that the solution to expanding the reach of DeFi is through “education, onboarding, and awareness of the risks.” People want the easy ability to reset a password instead of remembering 24 words.”
Daniel Peled, founder and president of public blockchain Orbs, is passionate about bringing financial inclusion to “all two billion people worldwide” but “the industry is early days”. He echoed Soubiran’s point that “many people don’t have access to DeFi applications; the products are complicated and high-tech. People still don’t know how to protect their funds safely.”
For Peled, though, it’s more than educating people, it’s about providing a level playing field where everyone follows the same rules:
“There is a huge quantitative easing and 70% of all the money in the world has been printed in the last two years. Young people do not own scarce existing assets, such as real estate, stocks, or gold; and they are not accredited investors who can take advantage of opportunities at an early stage. They (young people) are the ones who adopt DeFi because they see the opportunities compared to other alternatives.”
Ultimately, the creation of Bitcoin (BTC) sought to remedy such problems. As the first successful separation of money from the state, it has a clear issuance rate that makes the monetary network more transparent and equal for participants.
Michael Moro, CEO of digital currency broker Genesis Global, shared Peled’s insight on demographics:
“People in the west are the most committed to various DeFi protocols. The UI and experience aren’t great, as you need to be pretty tech-savvy to be able to interact directly with Defi today. Generally, it should be much easier for people to get involved.”
Ultimately, the panel agreed that a combination of education and onboarding will pave the way for greater financial inclusion.
Regulation is high on the agenda in 2022. But it should lead to more growth in the space, because “as long as the entry and exit ramps are regulated, there will be much more freedom,” Moro continued.
Soubiran shared a similar opinion regarding access ramps: “There is an opportunity for existing institutions to leverage blockchain technology and underlying infrastructure to provide the same services they provide today.”
As for the future of the DeFi and CeFi space, Nicolas Bertrand, former director of derivatives and commodity markets at Borsa Italiana, had the last word. When asked if the level of innovation could disrupt traditional cefi services, he replied, “Definitely.” He went on to say, “What happened to the telegraph after the advent of computers?”
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