Traditional Financial Companies Acknowledge the Value of Decentralized Finance (DeFi)
Decentralized finance (DeFi) refers to the use of decentralized protocols to transfer value and access financial services in a permissionless manner. Amongst the latest trends is an incredibly exciting new shift toward DeFi. Forbes reports that traditional financial companies are starting to explore opportunities in the space, September 29, 2019.
To the Moon
Of late, decentralized finance has been a notable phrase that is causing quite a stir in the crypto and blockchain community. Whether you’re interested in smart contract platforms or are Bitcoin maximalists, if you’re in this space you’ve likely heard of DeFi.
In this context, however, DeFi refers to the entire ecosystem of permissionless cryptocurrency rather than the wide slew of services available on Ethereum.
Rainer AG is a Swiss financial firm with over 30 years of experience in traditional finance operating in a jurisdiction that is open to financial innovation, provided them with the opportunity to realistically pursue products related to cryptocurrencies. The company launched an international security token offering (STO) platform, a cryptocurrency trading platform, and an online service to transact with cryptocurrency and fiat from a single account.
Many larger companies such as Overstock, Microsoft, and Samsung have also decided to integrate decentralized finance in their business models by providing services in the realm.
These businesses understand the need for a power shift, which is also backed by strong, innovative technology. Permissionless financial systems can help increase the scope of financial inclusion by making it easier for people to store, borrow, and lend money.
Security for 21st Century Finance
A study conducted by CIODIVE revealed that cybercriminals are 300 times more likely to target s financial service firm than one of their peers in another industry. PwC research further adds that 45 percent of all financial intermediaries face continuous cyberattacks, some of which are incredibly dangerous.
Technology spending at banks and financial institutions has been on the rise, as has revenue for IT companies. With strong cryptographic measures and robust game theory integrated into systems to thwart attackers, cryptocurrency is slowly but surely developing into a new security model for the financial world.
Ironically, each hack makes a network stronger, and given the speed of trends in cryptography and cybersecurity, we can expect to have a much more secure and resilient financial system through permissionless finance.