Decentralized finance (defi) is gaining momentum in regions with weak banking systems like Sub-Saharan Africa, Latin America, and Eastern Europe. Experts attribute this to defi providing financial tools and services that were previously inaccessible to people in these areas. They also highlight the user-friendliness and security of defi compared to traditional financial institutions in these regions. However, challenges such as complex onboarding processes, regulation, and hacking threats hinder widespread adoption. The recent Chainalysis crypto adoption index shows a decline in high-income countries' crypto activity, while activity in lower and lower-middle-income countries remains consistent. This suggests that people in these regions continue to embrace crypto despite market fluctuations. Experts believe that defi is seen as extremely useful in markets where traditional financial institutions are perceived as unfriendly, providing financial autonomy and security. However, defi still faces challenges such as liquidity fragmentation, regulatory uncertainty, and hacking threats. Nonetheless, experts expect adoption to explode once these challenges are overcome.
- Content Editor ( news.bitcoin.com )
- 2024-09-18
Experts: Defi Thrives Where Banks Falter, Fragmentation a Hurdle