Decentralized finance (DeFi) protocols are “crucial” for financial inclusion, particularly in the developing world. And despite being inherently centralized, central bank digital currencies (CBDCs) are a welcome part of that, said the participants at a discussion hosted by the Bank for International Settlements (BIS).
Speaking at the BIS’ DeFi 22 conference on Monday, Jan Brzezek, CEO & founder of Crypto Finance, described DeFi as “crucial” in today’s ultra-low interest rate environment, and said it is particularly important for people who are left behind by the traditional financial system.
This includes people who can utilise DeFi solutions to get a loan for just small amounts of capital, or can lend money to others and get a yield on it, Brzezek said, while rejecting a commonly held notion that DeFi is mainly used for speculation.
This view was shared by fellow panelist Evan Van Ness, a technologist and investor in Web 3 technology at Starbloom Ventures, who called the technological progress seen in the crypto space “unstoppable.”
The comments from Van Ness came after he was asked by the panel discussion’s moderator, BIS researcher and economic advisor Hyun Song Shin, why it wouldn’t be better to just improve on the current system rather than designing an entirely new decentralized financial system.
Access to DeFi and digital dollars can be a “life and death” issue for people in countries without stable banking systems, Van Ness said.
He added that these are countries where people have been robbed of their savings through inflation, corruption, and incompetent governance for decades before technology finally offered a solution to the problem.