According to a report published by ING, many components of traditional finance may be improved and applied to DeFi.
ING is a multinational banking and financial services firm founded in 1991 and headquartered in Amsterdam, Netherlands. The bank issued a white paper lately titled “Lessons Learned from Decentralised Finance” which explored the possibilities and disadvantages of DeFi.
“DeFi is a coin with two sides – there are serious risks in DeFi that should be considered. This is where centralised financial institutions can in fact help DeFi companies in addressing these risks.”
“Lessons Learned from Decentralised Finance”
Analyzing DeFi’s opportunities and obstacles, ING’s report stated the world would benefit from the cooperation of centralized and decentralized financial institutions.
“Despite that these centralised and decentralised financial services appear to be different, based on our analysis we envision that these two services combined will bring benefits to both centralised institutions, to DeFi, and more importantly, its customers.”
“Lessons Learned from Decentralised Finance”
DeFi’s ecosystem fascinates ING. The bank thinks that centralized financial institutions require a great deal of time and money due to various regulations, and this is where DeFi could help out.
The Dutch bank is very avant-garde when it comes to cryptocurrencies. We can mention the creation of Pyctor, a custody and post-trade infrastructure for digital assets, or the anti-money laundering measures called The Travel Rule Protocol.
But what is DeFi?
DeFi is the short term for “decentralized finance”. DeFi is a bundle of financial services on public blockchains that use smart contracts. DeFi’ can help you with most of the things a bank does without requiring paperwork or third parties.
DeFi is global, peer-to-peer, and open to all. Services DeFi includes stablecoin issuance, peer-to-peer payments, lending/borrowing, trading, insurance, and more. There is no form to fill out or account to open. DeFi offers very competitive returns compared to traditional financial markets and other crypto opportunities.
Read more about decentralized finance (DeFi) in this article!
