Financial Literacy Month – Decentralized Finance or DEFI
Back in 2005, when April was declared Financial Literacy Month, it’s quite likely no one predicted what April 2020 would bring. As the COVID-19 pandemic has impacted global citizens, understanding finance is at the forefront of many conversations. It has also changed the way finances are managed.
Many people are turning to online solutions to manage finances. According to Mobilepaymentstoday.com, there has been a 20% increase in online transactions worldwide since the start of the pandemic. Those transactions have doubled in Japan and rose by 70% in the U.S.
In the midst of this, Decentralized Finance, or DeFi has been increasing in popularity as people search for safe alternatives to traditional financing. In fact, DeFi has been hailed as leading the way out of imminent financial crisis.
Decentralized finance, or DeFi, simply refers to financial software that is built on the blockchain to make it easy for anyone to piece together digital assets and financial smart contracts. It is widely considered an alternate future for the traditional finance sector.
You can do a deep Dive into DEFI here
Historically, the global financial markets have been out of reach for many people. Unless you have the appropriate wealth, location and connections, investing for the general population can be difficult and expensive. With DeFi, many of today’s financial services, including saving, loans, and trading will be accessible to anyone in the world with a smartphone and internet connection.
“It's one thing to have digitized self-custody of currency or securities, but we already know that financial instruments are a needed layer on top of base currencies to facilitate transactions in society,” Nanthakumaran says.
“DeFi tackles this and is definitely one of the killer use cases of blockchain technology and specifically smart contracts.”
April 2020 has certainly been an interesting Financial Literacy Month. As we look to the future, we’re confident that with defi solutions there is light at the end of the tunnel.