While the price action continues to confound market makers and traders, professionals in the cryptocurrency sector came to a consensus on a number of critical aspects last week. Particularly notable is the fact that centralized finance (CeFi) and decentralized finance (DeFi) can coexist, and that in the future, a „mix“ of financial products and services will be available to customers.
The panel discussion „Can CeFi and DeFi Coexist?“ for the Global Blockchain Business Council took place on January 21 and was moderated by Cointelegraph. In the video, panelists discuss topics such as adoption, banking the unbanked, and if innovation would lead to the demise of established financial institutions.
The necessity for increased education and openness in the cryptocurrency arena, as well as the possibility of achieving financial inclusion through smooth onboarding processes and clear-cut legislation, were among the most important concerns raised. Popular blockchains, such as Solana and the Bitcoin Lightning Network, as well as DeFi protocols, such as Uniswap, have appeared in recent months.
According to Mary Beth Buchanan, president of the Americas and chief legal officer of crypto risk and intelligence firm Merkle Science, education is important.
„A large number of people are not being served by traditional financial institutions. „The project that has the ability to reach individuals in the community who are not currently able to get DeFi will be the winner in the disruption race, and there must be education.“
Ambre Soubiran, CEO of digital asset data company Kaiko, agreed that the key to expanding DeFi’s reach is „education, onboarding, and a thorough understanding of the dangers.“ People prefer the convenience of being able to reset a password rather than having to memorize 24 words.“
Mr. Daniel Peled, the founder and president of public blockchain Orbs, is passionate about delivering financial inclusion to „the two billion people around the world,“ but he acknowledges that „the business is still in its infancy.“ According to him, „many individuals do not have access to DeFi applications; the products are sophisticated and tech-heavy.“ He agreed with Soubiran’s opinion that „many people do not have access to DeFi applications.“ People are still unsure about how to properly safeguard their assets.“
Peled, on the other hand, is concerned with more than just teaching people; he is also concerned with creating a fair playing field where everyone follows the same rules:
„There has been massive quantitative easing, and in the last two years, 70 percent of all the money in the globe has been printed,“ says the author. Real estate, stock, and gold are not held by the young, nor are they accredited investors who can take advantage of early-stage opportunities in these asset classes. They (the young) are the ones who are adopting DeFi because they recognize the advantages it offers when compared to other options.“
When Bitcoin (BTC) was created, it was intended to provide a solution to these problems. Due to its historical significance as the first effective separation of money from the state, it has a predictable issuance rate, which makes the monetary network more transparent and equal for all players.
Peled’s point of view on demographics was shared by Michael Moro, CEO of digital currency broker Genesis Global:
„The people in the western hemisphere are the most interested in various DeFi protocols. Defi’s user interface and overall experience aren’t particularly impressive, and you must be fairly tech knowledgeable in order to engage directly with the company right now. „It needs to become significantly easier for people to participate in general.“
Ultimately, the panel came to the conclusion that a mix of education and onboarding will pave the road for increased financial inclusion in the long run.
Related: Decentralized finance vs. centralized finance: A comparison between decentralized vs centralized finance
In the year 2022, the topic of regulation will be high on the agenda. „As long as the on ramps and off ramps are regulated, then there will be a lot more freedom,“ Moro explained, adding that the move should spur additional development in the area. ”
When it comes to onramps, Soubiran expressed a similar point of view: „There is a potential for existing institutions to leverage blockchain technology and the underlying infrastructure in order to continue to deliver the same services that they currently provide.“
When it came to the future of the DeFi and CeFi spaces, Nicolas Bertrand, a former head of derivatives markets and commodities at the Borsa Italiana, had the final say on the subject. When questioned whether the amount of innovation could cause traditional cefi services to become obsolete, he said affirmatively. Afterwards, he inquired, „What happened to the telephone with the invention of the personal computer?“
