Topic: Will "De-Fi" replace traditional banking in the future? - page 3. (Read 1026 times)

It must always be remembered that traditional banks are actually part of the state structure and as such they will exist until the states themselves exist in their current form. DeFi projects have offered a new direction in the financial sector, where civil transactions are concluded and executed automatically, using smart contracts. In the future, this can be further developed and extended not only to cryptocurrency. However, already now, for the first time, cryptocurrency has come close to performing the functions of a bank.

That's certainly true, mate. No matter how far "De-Fi" goes in terms of mainstream adoption, it'll never be able to replace traditional banking. That's largely because banks have dominated the world's economy for a very long time. People are accustomed in using Fiat for daily transactions. They wouldn't want to change that for crypto assets which are volatile and extremely risky. I guess that "De-Fi" will turn out to be a niche more than anything else. Techies and libertarians will be the ones that will use "De-Fi" platforms the most.

Nonetheless, time will tell us if "De-Fi" will turn out to be an idea that will fade into oblivion. If it survives, expect it to be an alternative than a replacement to the current banking system. The "Unbanked" will quickly resort to "De-Fi" for traditional banking services without the need for KYC/AML. The combination of decentralized stablecoins and borrowing/lending services, will allow anyone to be their own banks. It'll be completely revolutionary as people will gain full control of their financial life. But ultimately, banks will prevail in the mainstream economy. Just my thoughts

if not completely why not slowly ? we people do love decentralized and we are in the movement towards the legalization of defi but we can give time to other people to adjust and synchronize thier funds from banks to defi  .

 emergency loans and storing funds or other service that traditional bank offer can also be found out on the defi but with more of a modern touch because all can work here in automation without middle men or without people that works in the background  .

I dont think it can replace the traditional banking completely even it became successful and adopted worldwide.

People are used to bank and fiat so its going to be hard to live without banks that they can rely in times of emergency for taking loans and storing their savings.

Maybe with defi palication it will facilitate economic growth and facilitate loan transactions for all people who like to use loan or defi services

Maybe or maybe not. For what I know, crypto behaves in strange and bizarre ways. I've seen the impossible happen within all of my years in crypto land. If "De-Fi" becomes robust and mature enough for the mainstream world, it could render banks obsolete. But the chances of this happening are very slim. Banks will most likely adapt to the current situation by adopting blockchain technology for their own benefit. And since Fiat currencies still dominate the world's economy, crypto and "De-Fi" will remain as alternatives to traditional banking than a replacement in the future.

By all means, "De-Fi" will serve as the ideal tool for "unbanked" to get access to services provided by traditional banks. It's expected the industry will improve over time, as developers make "De-Fi" platforms robust for widespread use in the mainstream world. The risks with "De-Fi" are a lot higher than traditional banking. But the rewards are simply too hard to ignore. Ultimately, people will decide whenever they'd want to use "De-Fi" on top of traditional banking or use both for added convenience. As long as there are developers working hard to make "De-Fi" a widespread success, nothing should go wrong. Just my thoughts

My mind was already made up on the fact that DeFi could in the future make banks absolute, despite seeing all the reasons outlined here, which of course are valid. It only makes sense to detach society from such a warped way of traditional banking which is made for the rich.

Decentralisation is the way forward and of everything else that's available as an alternative DeFi is the strongest viable option. I do believe this transition would be slow and nonetheless in the distant future but entertaining the idea makes it the more probable, don't you think?

Good point. Bitcoin has been the most widely successful implementation of an alternative financial system with decentralization in mind. Yet, it has been unable to replace traditional banking in its entirety. This is largely because banks still dominate the world's economy. After all, governments issue Fiat currencies through central banks. The fact that Fiat is stable while crypto is not, makes the latter a terrible option as a currency for day-to-day transactions. Which is why I think that "De-Fi" has a very small probability of replacing traditional banks in the future.

In the bright side, people have a choice to exit from the current monetary system subject to corruption and manipulation. Crypto's decentralized and censorship-resistant nature, allows anyone to use it as an alternative financial system in times of need. No one can freeze your assets on crypto or confiscate them (depending on certain conditions, of course). People looking for an alternative to Gold could simply invest on Bitcoin and use it as a safe-haven asset against traditional Fiat. "De-Fi" brings "banking to the unbanked" allowing anyone to freely do whatever they want with their money in a completely private (sort of) manner. Even if "De-Fi" becomes extremely popular in the mainstream world, it'll always be an alternative than a replacement of banks. Just my thoughts

You’re asking this question because there is hype surrounding DeFi and you’re thinking that it is going to be so huge in future and to the extent of replacing traditional banking. This kind of question is like what a lot of people used to ask about Bitcoin before, and the funny thing is that some even started believing that it is going to happen.

It doesn’t work that way. We all like cryptocurrency and all these things, but to be sincere, I don’t think it’s going to be as a lot of people here do think. They are not going to be replacing anything, they are a different system on their own.

DeFi aims to be an alternative not the main one when it comes to finance system.  I do think it will become popular one day but it will never replace the banking system.  Before assuming anything, we have to see DeFi first to be established and prove itself that it is not an exploitable system without being centralized.  Aside from that I believe it will be strongly opposed by the centralized authority because it goes against their own central authority.  The best contribution of DeFi is their effect on the shaping of future finance system but it will never replace traditional banking system.

That's certainly true, mate. At least, "De-Fi" is an option for the unbanked people to enjoy traditional banking services without the need to go through ID verification. It's just starting to blossom, so we can't tell if it'll rival traditional banking in the time being. We'll have to wait and see if developers are able to maintain "De-Fi" platforms robust enough for the mainstream world to enjoy. With many services like lending and borrowing, "De-Fi" platforms often resemble their centralized counterparts. Decentralization brings financial inclusion to anyone worldwide, making "De-Fi" a trending subject on the crypto/Blockchain industry. With due time, "De-Fi" will be able to be as close as traditional banking in the mainstream world. However, De-Fi" may never be able to replace it since governments patronize banks for the circulation of Fiat currencies worldwide. There will always be a clash between the centralized and decentralized world, as people transact in different types of currencies, precious metals, and more.

All in all, "De-Fi" looks quite promising but it has a long way to go before it's considered as something serious for both the "Banked" and "Unbanked" people. This craze will put several "De-Fi" platforms and blockchain networks to the test in order to determine the right path for the industry. As long as "De-Fi" brings legitimate use cases, it'll see the green light by mainstream governments. Otherwise, you can expect heavy-handed regulation which will stifle the industry's growth worldwide. Just my opinion

We cannot replace the banking system it's also an evolving industry and DeFi is not yet secured way to do banking I don't think banking is replaceable even in the future, they have their own industry to serve so we prefer them to exist together to serve all sectors of the industry, it's a win-win situation for both of them.

DEFI will be more popular, but it cannot replace banking, even though it offers banking services. DEFI is currently just helping people to make a profit by taking deposits and paying interest, decentralized loans are impossible.
Banks are governed by the government and they keep rates and interest rates more stable. Also, the bank performs several functions such as paying taxes and paying bills monthly.

At least, "De-Fi" will prove to be an alternative to the existing banking system. It may not be able to replace it, since governments rely on central banks for the circulation of money in the mainstream world. The unbanked will be able to enjoy all of the benefits of traditional banking (sort of) by using "De-Fi" platforms across various blockchain networks. ETH, being the most popular smart contract platform in the world, has attracted the likes of developers and individuals alike. Most (if not all) "De-Fi" platforms are built there because ETH is a battle-tested blockchain network with focuses on decentralization above anything else. While current fees are ridiculously high, there's already a scaling path for the "De-Fi" industry to keep moving forward.

Despite the current hype surrounding "De-Fi", it's still not ready for widespread use in the mainstream world. Besides performance issues, there are many flaws inherent within smart contracts which powers the "De-Fi" ecosystem. It may take a long time before the industry matures, in order to become a viable competitor against the traditional banking system of today. Considering that "De-Fi" is still experimental, it's not recommended to put more money on "De-Fi" apps than what you're willing to lose. Let's hope that as the crypto/Blockchain space grows, "De-Fi" will advance in development, innovation, and most of all, mainstream adoption. Just my opinion

this The topic just same like the other person say couple years ago
Will bitcoin replace money??
Ya no one know what happen in the future, but theres always a changed in our life, it will born new einstein that can make great idea and born a good project for human being
We must adaptive with new system we have to face the change or we get left behind
So i believe someday bitcoin or defi will replace the old system of currency or money

It is difficult to conclude whether DEFI can replace banks because they are just getting started and the capitalization of DEFI projects is very small for the banking market. The DEFI projects are overrated, even though they are new projects. When the government sets cryptocurrency regulations, DEFI is the real rival of the bank.

No doubt that cryptocurrency will replace the traditional banking in the future, defi projects are the building the platform for it.
People will prefer to manage their money freely with their own will than using other central services like banks.
The good thing in defi for me is everyone can using stable coins without fear to volatility of crypto.

I don't think that the Defi program can replace the traditional banking eye in the future, you should know that Defi is a new program and even I personally have no interest in taking part in it. this is only a HYPE and will not possibly replace the traditional banking currency.

Since its being used right now by crypto users, then it must have the future and could evolve into something bigger.  If it can't replace the traditional banking system then there is no purpose in developing it. It is however going to be challenging because the banks today are also developing their own digital currencies to match the projects that crypto has offered.

We're still in a hype phase, so anything can be expected in the following months. I'd say that the "De-Fi" space needs more time to mature before it can be considered a "replacement" of traditional banking. Even if it improves, it may not be able to replace banks in the future, as they dominate the world's economy. "De-Fi" will become widely used by the "unbanked" serving its particular use cases in the mainstream world. There's still a lot of room for growth, so I'd expect "De-Fi" to become robust in the long term.

I believe that once the hype cycle is over, this emerging industry will be put to the test. Only projects with active development, innovation, and real use cases for the mainstream world will survive in the long run. For what I know, nothing is perfect. There are many flaws adherent to smart contracts providing "De-Fi" services to everyday users. Banks on the other hand, are much more secure and reliable, leading people to trust them more than anything else. Besides, "De-Fi" is becoming practically useless with the extremely high fees on the Ethereum blockchain. Last time I've checked, I needed to pay $126 (USD) in fees just to withdraw my tokens from a "De-Fi" protocol known as "Instadapp". This is insane, as it's unpractical for the average person like me. Unless ETH upgrades to PoS and becomes more scalable, "De-Fi" adoption will be limited. While there are other scalable blockchain networks like TRON and EOS, they lack an ample ecosystem of dApps.

All in all, no one knows what will happen in the future. "De-Fi" could either survive or fade into oblivion in the long run. It's extremely risky right now, so I'd advice to proceed with caution. We should give it some time, for the space to mature. Only then, we can determine if "De-Fi" will pose to be a threat to banks' existence (which I doubt it) or not. Just my thoughts