DeFi a Serious Threat to Supremacy of Traditional Finance
Decentralized Finance (DeFi) poses a serious threat to the supremacy of financial institutions.
This according to ARK Invest founder Cathie Wood who in a recent conversation with Miami Herbert Business School, discussed the booming sector’s potential effect on traditional finance. She said:
“The financial revolution is DeFi and really, it’s just taking all the middlemen out of the financial ecosystem. A real threat to all of us… We know that the combination of digital wallets and DeFi is going to hollow out a lot of financial institutions. It may already be [ongoing] because a lot of lending and saving is taking place on DeFi because it offers lower loan rates and higher saving rates, so that’s a compelling combination.”
Wood noted that DeFi is currently “scaling enormously” and has had its stress-test in the recent past. Pointing to DeFi users leveraging Bitcoin (BTC) and Ethereum (ETH) when markets tank, she said:
“In May of 2021, we had Bitcoin cut in half, Ether cut by more than half. I was waiting for the leverage in the DeFi system to topple it, and it didn’t. And whatever doesn’t kill [them] is making them stronger.”
In a recent interview with TIME magazine, Wood had predicted that decentralized finance (DeFi) and non-fungible tokens (NFT) would continue their momentum and shine in 2022. She had said that DeFi has the potential to take over a large share of traditional finance already.
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Source: igaming
