In the rapidly evolving landscape of finance, Decentralized Finance (DeFi) platforms stand out for their potential to revolutionize access to financial services. According to Anton Bukov, co-founder of the decentralized exchange 1inch, DeFi boasts a significant cost advantage over traditional banking methods, especially for new user onboarding.
During his presentation at the Dutch Blockchain Week, Bukov highlighted a staggering metric: traditional banks incur expenses ranging from $100 to $300 per user to verify documents and establish accounts. In contrast, online banking institutions spend approximately $20 to $30. DeFi, however, requires virtually nothing beyond a smartphone and internet access.
As Bukov succinctly puts it, “Onboarding to DeFi literally costs zero. You don’t need brick-and-mortar infrastructure or lengthy verification processes. Just connect and transact.” This simplicity offers DeFi a remarkable edge when it comes to reaching the 1.4 billion individuals worldwide who currently lack access to banking services.
Reaching 1.4 Billion Unbanked Users
“That’s why we have 1.4 billion people on the planet who are unbanked. No one’s going to invest those hundreds or tens of dollars into them because they will never return to them,” Bukov explained, highlighting the rigid barriers entrenched in traditional finance systems.
The inherent advantages of DeFi allow the unbanked to engage in the global economy, facilitating real-world transactions using stablecoins like Tether’s USDt (USDT). As Bukov noted, DeFi serves as a transformative tool for financial inclusion. With the continued expansion of internet access, particularly in developing regions, DeFi is poised to attract users who have historically been excluded from traditional banking.
“You can just get a phone, access to the internet, and you can exchange your chicken for USDT,” Bukov remarked, illustrating just how accessible and participatory DeFi can be.
DeFi: A Gateway to Global Liquidity
Beyond financial inclusion, Bukov emphasized the real value of cryptocurrency lies in its ability to provide access to global liquidity. He framed crypto as an evolving independent economic zone, a space where billions of dollars are transacted through decentralized protocols.
“Crypto isn’t just about adopting stablecoins or building national digital currencies; it’s a growing global liquidity hub,” Bukov asserted. This dynamic liquidity permits a range of financial experiments, including yield strategies and cross-border capital movements.
Bukov further stressed that countries willing to adapt their regulations to facilitate access to global liquidity can unlock significant economic opportunities. “The more countries trade with each other, the more they succeed. Crypto works the same way,” he explained, highlighting the interconnectedness that DeFi fosters.
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In conclusion, as awareness of DeFi grows and technology continues to advance, the opportunity to bridge the gap for the unbanked population becomes increasingly palpable. The shift towards decentralized financial systems not only empowers individuals but also fosters a more inclusive and interconnected global economy.
