As our lives become more and more emersed in technology, certain traditions are being done away with. Much like every industry out there, banking is embracing technology. Since online banking, we have come a long way, which marked the beginning of the technological revolution in banking. Today, cryptocurrencies such as Bitcoin or Ethereum are more a part of the norm than ever before. As we embrace cryptocurrency, a new way of banking has come to light and is likely here to stay.
The Rise of DeFi
Decentralized finance, widely known as DeFi, manages financial transactions through the use of cryptocurrency and blockchain technology. This new way of financial management is replacing traditional, centralized banking with peer-to-peer relationships to democratize finance. Through DeFi, consumers can gain a full spectrum on every aspect of financing. This includes everyday banking, loans, mortgages, trading, and financial contracts.
DeFi is set to change the way we handle our banking and financial circumstances by challenging the centralized financial system. The centralized system we know today is riddled with governing bodies, gatekeepers, and the financial middlemen that regular consumers have to go through to gain access to even the most basic financial services. From loans, mortgages, and trading, consumers must always deal with the middlemen such as the banks and lenders.
With DeFi, the middleman is cut out of the equation, giving consumers revolutionary access to financial services. Defi will take power away from the middlemen and give it back to the consumers. By taking out the third party and opting for decentralized blockchain technology such as smart contracts, users will have clear and transparent control over how their finances are handled and where their money is going.
When consumers have the option to have more explicit control over their money and assets without having to deal with the middlemen, we’re likely to see them favour DeFi over traditional banking. As this rise of cryptocurrency continues, the end of conventional banking is becoming more inevitable. Although DeFi can seem complicated to the average person, it can make financial transactions less expensive and more secure. Over the next decade, we are likely to see the fall of traditional banking and the rise of decentralized finance.