DEFI:T THE BEGINNING OF A NEW BANKING ERA?
WHAT BANKERS AND ACCOUNTANTS NEED TO KNOW
Financial innovation has completely transformed the world over the past 500 years. The Italian Renaissance was fuelled by the birth of bonds and modern banking in city-states such as Florence. These tools were later perfected by the Dutch and the British. Napoleon’s defeat, after all, had as much to do with the size of the London gilt market as it did with troop positions at Waterloo.
This relationship between financial innovation and human progress is even more salient today. In the past two decades, financial technology specialists have started to rethink finance by opening up new possibilities for the transfer and generation of wealth. Of the many innovations that have arisen in this time, few will be as meaningful as decentralised finance (DeFi).
WHAT IS DEFI?
Decentralized finance (DeFi) is an emerging financial technology based on secure distributed ledgers. DEFi is a new vision of Banking and financial services that is based on peer-to-peer payments through Blockchain technology.
The system removes the control banks and institutions have on money, financial products, and financial services.
Decentralized finance started gaining prominence as a replacement for the traditional finance system in 2018 when 15 Ethereum-based projects came together with the aim of building an independent, secure, and open financial system. Some of the early proponents behind the DeFi movement included MakerDao, Origin Protocol, and Paradigm.
To be continued..........
