CNBC recently reported that more American banks will be adopting Bitcoin, allowing their customers to buy, sell, and HODL through their bank accounts. This is according to Cryptocurrency custody firm NYDIG, whose recent partnership with Fidelity National information services could merge banks and Bitcoin into one space.
Interestingly, in the same manner that U.S banks are adopting Bitcoin, banks from other parts of the world are paying close attention to other emerging technologies in the cryptocurrency space.
Most recently, ING, a leading bank based in the Netherlands has revealed that everyone’s attention is not tied to Bitcoin alone. Decentralized Finance, popularly known as DeFi, seems to be just as attractive to the firm. In a recently released report, ING bank revealed that it had been analyzing the DeFi Industry, and has apparently come to a conclusion that DeFi may possess some of the qualities that could make it more groundbreaking than Bitcoin in the finance market. In ING’s own words “DeFi could be more disruptive than Bitcoin to the financial sector.”
In summary, ING weighed the upsides and downsides of DeFi and drew up a bullish conclusion for the industry. Amongst many valuable qualities that come with DeFi’s structure, flexibility is one that ING noted to be a blessing and a curse for the industry. The lack of regulation in the DeFi Industry makes it extremely accessible to users who can explore DeFi services without worrying about any restrictions.
However, the lack of regulation also creates a loophole for onlookers with malicious intent. As ING explains: “DeFi is flexible because there is a lack of regulation. This lack of regulation allows for creating and using services, in principle, without any limitations. However, clearly there is a downside of the lack of regulation on DeFi, as it also easily can be used for fraudulent activities.”
It is therefore crucial that going forward, regulatory bodies are open to rolling out guidelines that are fair to the industry, as this would favor the growth of the industry and aid it to transcend into a more reliable space.
In ING’s bullish report, there’s an important twist to how the bank sees the future of DeFi. Although most would argue that the centralized ecosystem cannot coexist with the decentralized industry, as they are both different in so many ways, ING challenges this viewpoint to say that: “Based on our analysis and the lessons learned we conclude that the best of both worlds is achieved if centralised and decentralised financial services cooperate.”