“DeFi is revolutionizing the financial sector, breaking down borders and intermediaries, and serving as a catalyst for global transformation.”
Decentralized finance (DeFi) is an important vehicle in the transformation of the financial sector, since since it doesn’t have intermediaries to operate, it provides the necessary financial freedom tools for those who seek to walk in the digital world without rigid borders.
Through decentralized finance, today we have broader access to financial markets, ushering in an open world. A world like the one dreamed of by the author of the book The English Patient, Michael Ondaatje, with total freedom, without borders or nationalities that limit people in their efforts for development and progress. Like the lifestyle of merchants in medieval Europe, where they could travel from one city-state to another, bringing luxuries and news from faraway places with freedom of mobility and choice.
DeFi is giving new meaning to the concept of “finance for all”, bringing great possibilities from the point of view of wealth accumulation and low-cost financing, expanding the scope of financial transactions and significantly reducing their costs, this by using the Blockchain technology that has allowed intermediaries to be eliminated.
We cannot ignore that DeFi is the future of finance and other industries globally. Now the only question that remains is: how fast will DeFi be an accelerator of globalization?
Decentralized finance is offering a way to capitalize on crypto assets that are becoming more popular and more people are adopting them. This capitalization is taking place thanks to the fact that DeFi allows liquidity mining and yield farming, the latter is about profitability search models storing cryptocurrencies and is managed through smart contracts.
The depth of DeFi integration and the range of its uses are reflected in the existence of various types of applications that are prevalent in the sector. We have, for example, decentralized exchanges (DEX) that represent a high level of DeFi operations and offer authority-free cryptocurrency trading. Also
Part of decentralized finance are lending platforms and prediction markets, stablecoins that are linked to assets such as fiat currencies and precious metals.
Large cities prepare to adopt Blockchain technology and cryptocurrencies
Important cities are working towards the adoption of new financial technologies and opening the doors to expert citizens in the cryptographic market. We can see, for example, Dubai, a city that is attracting blockchain experts and enthusiasts, and which launched its Dubai Blockchain Strategy initiative in 2021, which became an important part of the United Arab Emirates Blockchain Strategy 2021, which seeks to migrate to the least 50 percent of government transactions to the blockchain. The government saw an economic opportunity for positive transformation in its innovative approaches.
Seoul, the capital of South Korea, developed a strategy in 2019 to become a world leader in blockchain technology. The Promotion Plan for the Blockchain City of Seoul, introduced by its then mayor, Park Won-soon. In order to become the basis of the Fourth Industrial Revolution. By 2018, the city was already using blockchain technology in various administrative services, and with this promotion plan, the objective would be to expand the reach of the technology by including direct democracy, online verification, mileage management through the issuance of S -Coin, the Seoul Citizen Card, and more.
In the state of Nevada in the United States, there is a proposal to create a cryptocity. It is an experiment carried out by Jeffrey Berns, a cryptocurrency millionaire who bought a piece of land in the Nevada desert and decided to lay the foundations for building a smart city based entirely on blockchain, which could incorporate payments in digital currencies for goods and services. , as well as records in a chain of blocks. This project is awaiting the approval of the authorities, to be able to start its construction next year, as expected by Berns.
Governments and decentralized finance
Different governments globally have been evidencing the potential of DeFi and blockchain, and how their non-adoption could cause an economic delay for their countries. One of the main signs of interest that the implementation of blockchain technology has aroused in governments is the launch of the central bank digital currency (CBDC).
Some countries have already launched the pilot versions of their CBDCs such as Ukraine, China, Sweden, South Africa, Malaysia, Singapore, Thailand, South Korea, Saudi Arabia, the United Arab Emirates, and several others. While others have launched their CBDCs as work projects such as Nigeria, the Bahamas and the Eastern Caribbean countries.
Global economic freedom, powered by DeFi, will allow governments to offer the best services in terms of quality, speed and efficiency, especially in the taxation of crypto assets.
Decentralized Finance (DeFi) has already proven to be excellent alternatives to traditional finance and a vehicle in accelerating globalization, as users can take advantage of lower transaction fees, higher interest rates, or the opportunity to diversify investments with an open, safe and transparent financial system.