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Due to the rapid growth of the decentralized finance space, the rise in demand, the improvement of its protocols, the breadth of offered services and opportunities will provide retail users with the options they are sorely lacking in the existing financial system. And it will enable institutions to move real-world assets onto the blockchain, generating untold cost-savings and improved efficiencies.
Developing the DeFi space is perhaps the most important task that lies ahead for the crypto community in the coming years but it need not be a violent revolution. DeFi doesn’t necessarily need to overthrow the incumbent system. DeFi will complement traditional finance, force it to do better, and, more importantly, allow for financial inclusion of the world’s 1.7 billion unbanked at last.
Major exchanges have been moving their focus to a new area: the public chain. And, unlike OKEx, the vision is for OKChain to be fully decentralized and not to be just an extension of our core business. Fiat-to-crypto exchanges will always be an important fiat currency deposit channel for the crypto world. However, as the recent incident with Wirecard has highlighted, they cannot be the only way to acquire more fiat on-ramps.
One important and currently underused way of depositing fiat funds to crypto is through customer-to-customer trading. This way, retail customers can securely deposit funds with stablecoins in a completely decentralized manner. This is actually a better choice for many people, given the uncertain regulatory climate and, in some countries, it may even be people’s only gateway into crypto.
C2C trading platforms are constantly improving yet, like everything in this nascent space, more work still needs to be done. Consumers need more education about the right stablecoin or token to use and how to choose a platform that offers security, a good user experience and trading depth. As improvements are made across the industry in this area, C2C trading will become the next essential fiat on-ramps for crypto and push adoption further.
OKEx’s peer-to-peer trading platform in India is a prime example of such a step forward in P2P trading. Through the platform, users in India can buy Bitcoin, Tether (USDT) and other cryptocurrencies with the Indian rupee, using multiple payment methods, including credit/debit cards, PayPal, PhonePe, IMPS, UPI and more.
India is a potentially huge market with a thriving population of 1.3 billion, of whom around 5 million currently own digital currencies. This shows great potential for growth. In addition, the combination of the Reserve Bank of India’s ban on cryptocurrency being lifted on March 4 and the widespread COVID-19 lockdowns has caused the crypto market in India to boom.
The development in the DeFi space has been nothing short of arresting. For users around the world to be able to access loans, lend and earn interest on their crypto in P2P transactions is an achievement of untold magnitudes that will eventually change the lives of many people around the world. For the first time, people will be able to sidestep a bank and transact directly from their mobile phones. They can earn interest, access credit, start businesses, send their children to school and lead dignified lives. All of this will be made possible through decentralized finance.
And it’s not just the promise of banking the unbanked or, rather, servicing the unbanked. The current financial system with its near-negative yield on people’s savings and the troublesome prospect of eroding their purchasing power doesn’t possess what DeFi could offer to everyone, the chance to earn real, meaningful interest on their savings. For once, people have access to the tools that the ultra-rich have had for centuries. They can make their money work for them and not the other way around. Through collaboration, innovation and persistence, the goal of #FinanceAll can be achieved.
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