Report indicates that although DeFi has the potential to disrupt traditional finance, leaders in incumbent financial services also have the opportunity to participate in and shape its impact on their businesses.
HONG KONG, Sept. 9, 2020 /PRNewswire/ -- Decentralized Finance (DeFi) growth has been explosive. In the last year, the value locked into DeFi has increased 1500% to $8bn, according to DeFi Pulse. As analysts question how disruptive it will be to traditional finance, Crypto.com and Boston Consulting Group (BCG), have today, released a joint research report weighing the implications DeFi will have on centralised finance.
"The Sudden Rise of DeFi: Opportunities and Risks for Financial Services" explores the factors driving the growth of the DeFi industry, which is an Open Finance movement built upon public programmable blockchains such as Ethereum. DeFi's proponents expect a disruption of mainstream financial services by allowing all aspects of financial services to be automated and performed by anyone, without a central authority or intermediary. The report tempers the anticipated potential of DeFi with an honest assessment of current challenges facing the industry and the underlying technology.
Regulation and governance have given the centralised finance (CeFi) industry an enormous proportion of the value generated from financial services. While DeFi may be perceived as a threat to CeFi, Crypto.com and BCG's report offers a roadmap for financial services leaders to build a new generation of politically and technologically resilient financial solutions that are extremely valuable and more relevant in today's digital economy.
Kris Marszalek, Co-founder and CEO of Crypto.com said: "Our joint research into DeFi provides a deep dive into the reasons behind its growth, differentiators against CeFi and its potential to disrupt mainstream finance. Whereas much existing research into DeFi is project-specific and crypto-centric, this report leverages both Crypto.com and BCG's respective areas of expertise to deliver a comprehensive side-by-side comparison with incumbents in traditional finance."
Kaj Burchardi, Managing Director with BCG Platinion said: "Whether companies choose to embrace decentralised finance or not, they still need to understand the impact it will have and track customer demand for autonomy, especially in payments, loans and exchange. By uncovering current levels of liquidity, charting the progress of regulation, and judging levels of risk - companies can continually assess whether services should be substituted for a more decentralised model. By partnering with Crypto.com, we have been able to advise companies with an honest appraisal on DeFi, giving them the tools to make informed decisions on its adoption."
About the research
Crypto.com was founded in 2016 on a simple belief: it's a basic human right for everyone to control their money, data and identity. Crypto.com serves over 3 million customers today, providing them with a powerful alternative to traditional financial services through the Crypto.com App, the Crypto.com Card and the Crypto.com Exchange.Crypto.com is built on a solid foundation of security, privacy and compliance and is the first cryptocurrency company in the world to have ISO/IEC 27701:2019, CCSS Level 3, ISO27001:2013 and PCI:DSS 3.2.1, Level 1 compliance. Crypto.com is headquartered in Hong Kong with a 500+ strong team. Find out more by visiting https://crypto.com
About BCG Platinion
As a part of Boston Consulting Group (BCG), BCG Platinion provides consulting services in design, development and implementation of advanced technology solutions that fuel creation of new-generation business models. Today, our presence spans the globe with offices in Europe, North and South America, South Africa and Asia Pacific.
About Boston Consulting Group
Boston Consulting Group partners with leaders in business and society to tackle their most important challenges and capture their greatest opportunities. BCG was the pioneer in business strategy when it was founded in 1963. Today, we help clients with total transformation—inspiring complex change, enabling organizations to grow, building competitive advantage, and driving bottom-line impact.
To succeed, organizations must blend digital and human capabilities. Our diverse, global teams bring deep industry and functional expertise and a range of perspectives to spark change. BCG delivers solutions through leading-edge management consulting along with technology and design, corporate and digital ventures—and business purpose. We work in a uniquely collaborative model across the firm and throughout all levels of the client organization, generating results that allow our clients to thrive.
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