Banks may not wait for regulation to embrace decentralized finance

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Decentralized finance or DeFi is rapidly catching up with bankers and technologists around the world, even though the regulations surrounding it are still not in place.

Decentralized finance offers a number of new opportunities for banks to expand their reach and reduce costs.

JP Morgan’s recent decision to redouble its efforts in the field of decentralized finance by opening a branch in the metaverse will encourage others to seize the opportunities it presents.

“Decentralized finance cannot be ignored by regulation as the next-generation decentralized infrastructure comes very close to existing payment rails with very low transaction speed, security and level of costs. Major banks around the world do not are not sitting around and waiting for regulations to come out because they believe new networks can help them save money,” said Sudhir Pai, Capgemini Chief Technology and Innovation Officer for Financial Services. , to the Times of India.

The launch of the Central Bank Digital Currency (CBDC) will also fuel the decision of banks to massively engage in decentralized finance.

“The main difference between open finance and DeFi is the sheer availability of access and how everything becomes borderless. New infrastructures are developed by new currencies. It doesn’t matter if it’s cyber-currencies, tokens or central bank digital currencies,” Pai said.

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