Could DeFi-powered banks become an unstoppable force in finance?
May 19, 2021. Summarized by summa-bot.
Compression ratio: 25.4%. 1 min read.
Banks lack an innovative streak, but cutting-edge DeFi protocols often have a usability problem. Is combining the two the answer?
It’s been interesting to see how new concepts and key milestones in digitization have been pioneered by so-called “challenger banks. ” These institutions, often fronted by fresh-faced financiers who previously worked at old-fashioned institutions, have seen how customers end up drowning in fees.
As you will have seen in countless articles on Cointelegraph, DeFi has been touted as the silver bullet that tackles the inherent flaws in the banking sector.
There’s a notion that banks and DeFi are like oil and water.
Meanwhile, DeFi protocols benefit from a usability perspective — accessing the interfaces that most consumers are already accustomed to.
DeFi platforms that partner with a licensed bank can support fiat currencies and digital assets alike — spanning USD, GBP, EUR, CAD, CHF and ETH, Wrapped Bitcoin and stablecoins.
Greater levels of integration mean that consumers can access multi-currency bank accounts and credit cards where all of their assets are listed side by side.
Long gone would be the days where a crypto enthusiast needs to log into one account to check their bank balance, and switch to an exchange app to see how their digital assets are faring.
Crucially, this licensed environment doesn’t need to be at the expense of what makes DeFi protocols special — the community.
Throughout the year, work is also continuing on building its suite of products — including a yield aggregator, fixed-term and variable-rate loans.