Cryptocurrencies are now almost essential in our lives. In addition to becoming more democratic, they have led to the launch of new technologies such as decentralized finance (DeFi) and Web3. Financial services executives need to start keeping up with these developments, as these concepts have the potential to further reshape the relationships of consumers and their financial service providers.
Concepts to consider
According to analysts of the evolution of new technologies, the future of finance will consist of both traditional (centralized) and decentralized finance.
Admittedly, not all consumers are yet very informed when it comes to the concepts of DeFi and Web3. Nevertheless, it is clear that the foundations have already been laid for strong buy-in to a decentralized future. Indeed, people are looking for practical solutions to better manage their finances and have better control of cryptocurrencies. This is precisely what the new tools make possible.
It is imperative that financial services leaders monitor evolving DeFi and Web3 ideals and innovations among American consumers. Otherwise, they risk losing business – not to competitors, but to other consumers, who serve as new providers in a DeFi world.
Understanding DeFi and the Web3 system
If it is so important for professionals in the world of traditional finance to take an interest in new technologies in decentralized finance and Web3, it is not for nothing. In fact, the reason is simple: more and more people are interested in it. Studies reveal that regardless of factors like age, gender, education, political affiliation, race, and income, many people want to get closer to anything DeFi-related.
Both DeFi and Web3 are meant to completely reshape the way people manage their finances. Digital assets and the blockchain technology on which they are based form the basis of DeFi. The advantage is therefore that transactions can take place directly, without the intervention of a third party or banking institutions as is the case with conventional banks.
As for Web3, it is an iteration of the Internet that hosts DeFi and other services. DeFi and Web3 are the promise of truly peer-to-peer financial services , such as lending, borrowing, payments, and insurance.
DeFi and Web3 are undoubtedly concepts that professionals in the traditional finance world would be wrong not to take into account. Indeed, they become popular and attract many people motivated by the desire to secure their assets and better manage their finances.
