The rise of DeFi and its predictions are all certainly potential symbols for Bitcoin and other cryptocurrency adoptions. Since 2017, it has been amazing to see blockchain-based financial applications and cryptocurrencies growing massively. Bitcoin, Ethereum are welcomed by everyone. We saw the innovations, and adoptions go hand-in-hand in the banking industry.
We see new players, top companies joining the DeFi race to lead and standardize the financial systems. DeFi, short for decentralized finance, is the result of disruptive blockchain technology. It has evidently begun an era of “going digital.” Several decentralized applications entered to manage and bridge the gaps in the central regulatory bodies. They were started to offer easy banking activities such as loans or saving accounts-related tasks across the world. They have existed with no restrictions around, in fact with an added transparency to the activities.
Soon, we will see blockchain attracting the funding products that are attractive in terms of the easier application process with crypto-secured loans facility being a day process. These loans could serve as the purposes of mortgage, auto loans, and allowing crypto holders to leverage BTC and other cryptocurrencies in their savings account to be collateral. This is entirely in contrast to what we see in the traditional lending collateral system. We do it with physical assets such as cars or houses.
What is it like to be with DeFi?
Well, you saw Visa company’s recent move towards Visa crypto software program aiming to purchase crypto? Also, spending it on normal goods and services via the Visa network. Interesting right? This is how it is supposed to be!
Visa’s CEO A1 Kelly made a mark while explaining their strategy. “Our strategy here is to work with wallets and exchanges to enable users to purchase these currencies using their Visa credentials or to cash out onto our Visa credential to make a fiat purchase at any of the 70 million merchants where Visa is accepted globally…”
Ultimately, blockchain-based crypto versions have brought savings accounts, loans, and credit cards plus trading platforms in one go. Quite exaggerating! As a result, we see a significant movement from cash to crypto. That’s big news for crypto-savvy people.
Do you notice the traction towards crypto from traditional finance?
The central institutions and other financial institutions are running slowly to build their own blockchain infrastructure and bring up central-operated digital assets and blockchain-backed infrastructures. However, these are really slow.
For instance, while the central institutions are still in thoughts to integrate crypto into their services, a few developed countries are already buying and holding crypto. We know people are looking for open and safe asset storage applications or platforms as it relieves the biggest fear of criminal activities and other malicious attacks.
On the other hand, stablecoins. They are extremely vital in this change process as they have created a path for traditional banks to interact with new and existing blockchain networks.
Go to 2030, maybe?
Fast-forward to five years from today might be like, we are surrounded by complete digital banking systems, Bitcoin serving as the primary digital currency. Central governments and other financial institutions have their own digital currencies tied up to Bitcoin and maybe other cryptocurrencies. Employees in countries like the USA being paid in terms of $USD Coins.
Now here we want to remind you about the long-term predictions and short. Also, remember the volatility in the crypto space. Ultimately, we might see DeFi playing a long-term role, changing the capabilities of the traditional finance space, adapting to the new blockchain technology, and rapidly changing the banking environment.