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DeFi ‘Crucial’ for Financial Inclusion, CBDCs Still Welcome Despite Being Centralized

05 Apr 2022 By : Coin Gabbar
DeFi ‘Crucial’ for F

Decentralized finance(DeFi) protocols are “crucial” for financial inclusion, particularly in thedeveloping world. And despite being inherently centralized, central bankdigital currencies (CBDCs) are a welcome part of that, said the participants ata discussion hosted by the Bankfor International Settlements (BIS).

Speaking at the BIS’ DeFi22 conference on Monday, Jan Brzezek, CEO & founder of Crypto Finance,described DeFi as “crucial” in today’s ultra-low interest rate environment, andsaid it is particularly important for people who are left behind by thetraditional financial system.

This includes people whocan utilise DeFi solutions to get a loan for just small amounts of capital, orcan lend money to others and get a yield on it, Brzezek said, while rejecting acommonly held notion that DeFi is mainly used for speculation.

This view was shared byfellow panelist Evan Van Ness, a technologist and investor in Web 3 technologyat Starbloom Ventures,who called the technological progress seen in the crypto space “unstoppable.”

The comments from Van Nesscame after he was asked by the panel discussion’s moderator, BIS researcher andeconomic advisor Hyun Song Shin, why it wouldn’t be better to just improve onthe current system rather than designing an entirely new decentralizedfinancial system.

Access to DeFi and digitaldollars can be a “life and death” issue for people in countries without stablebanking systems, Van Ness said.

He added that these arecountries where people have been robbed of their savings through inflation,corruption, and incompetent governance for decades before technology finallyoffered a solution to the problem.

As an example, Van Nesssaid working class people in Argentina, a country he said he has spent a lot oftime in, typically buy the stablecoin USDC to protect against the highinflation there. “They like to use DeFi,” he said.

And while Van Ness arguedthat DeFi is popular in Argentina, he also said central bank digital currencies(CBDCs) would be “great,” adding that he thinks they are “inevitable” because“technology always wins.”