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There are many "De-Fi" (Decentralized Finance) apps out there in the crypto/Blockchain space, each with their unique features and offerings. The most popular one is Compound.Finance which provides loans and also lets lenders earn from attractive interest rates. So far, "De-Fi" apps have been widely successful providing "Banking to the Unbanked". With stablecoins mimicking traditional Fiat currencies, people can enjoy banking in a completely decentralized manner. The emergence of COVID-19 in the mainstream world, has accelerated adoption of "De-Fi" apps and stablecoins by a large rate.

If "De-Fi" apps become extremely popular and work as intended, do you think the industry will replace traditional banking in the future? Or does it have a long way to go?

Your input will be greatly appreciated. Thanks in advance. :)

I would agree that it will become popular as obviously it is just the beginning. But I doubt that it will replace the traditional banking system. It's already a pillar of government so there's no way that a country will exists without it.

Besides, this Defi seems to be just a bubble, so there is that possibility that the hype will die down a bit after the burst. But it will still remain in the crypto sphere, until a new hype comes along.

With bank you can show up in your financial center with nothing more than your ID, and get a personal loan for your needs. Or you can buy a car or a house or a lot of other things. You can also get a business loan. DeFi doesn't offer any of those things. And it won't be, it's limited to blockchain assets, and the moment it tries to live it it would have to introduce trust or it will fail like the DAO did.

Before we talk about replacing the traditional financial system let them start being operational and actually provide this so much talked about decentralize financial services to people, let the people use the service and perhaps give a positive feedback, because all I see for now is just hype and price pump, no practical usage for now which will be the key point to be looked upon before any further talk of replacement.

it won't, because DeFi will only be popular among crypto lovers. Traditional banking will exist and will not be replaced. the current banking system is difficult to replace because people are comfortable with the current system. and as long as countries still use FIAT as their main currency, DeFi will not be able to get a place.

DeFi gets hacked or exploited all the time. When you lose money there is usually no way to get it back. Most people are fine using traditional banking because they feel more secure. Even the DeFi shillers are not going all in on DeFi and probably keep most of their money in a bank.

It there will be something that is going to replace traditional banking system, it should be bitcoin. However, it is not the case, too much issues, like scalability, market's volatility etc. And as far as Defi goes, it doesn't have the stability that banks gives. There are too many players in the market that can manipulate and then scams and hacks. So there's no way that banking system will become obsolete because of this Defi hype.

Even if it becomes extremely popular I don't think it can and will ever replace the banking system, the banking system is deeply embedded to our system because not everything can be done online, you can blame it on some sectors and countries where the internet connection is very poor and there are some people who do not understand the DeFi language.

Traditional banks will adapt to new techs, i dont think that they will gone somedays

If they can do what traditional banks can offer maybe. But lets be realistic here. Its gonna take many years before people shift to cryptocurrency and used that like what banks are doing. Im not sure about the topic if comparable but it seems too early to see the possibility of this.

They will not gone until the end but the fact that tech is evolving some partnership on digital currency can still be possible but replacing them is quite impossible.

what about your own opinion? you've been creating threads like this one so i think it would be better if you have at least provided your own opinion on your opening post.

defi won't replace traditional banking. most people are still careless and don't want to use something risky. they want to be able to get back their money when something goes wrong. with defi you can't do that, either the network is secure or not. which means there's no way the majority of the people will use something like that to hold millions of their funds.

It's good that we have DeFi I've seen it's potential Coinmarketcap and Coingeckohave created a page dedicated to DeFi tokens these projects with it's features really have potential in the market, but we cannot disregards the services of the banks and how they served the many sectors of our society, they probably can co exist but it's unlikely that banks will vanish in place of DeFi.

Guys, be aware, all of your DeFi coins are overvalued. When you stake/mint your coins you get a loan and you can use the debt for buying more coins. But at the end, the value of the coin what you have minted is 0, not backed, not useful for anything else..  ::)

Defi projects has the potential to do great things in this space, but I don't see them with the ability to replace the traditional banking structure. This is because every independent country would like to be on top of the finance in the country and control the option for citizens. Most countries don't even have cryptocurrency as a legal tender so it would be difficult to inculcate it or replace the traditional banking.

The biggest part of the coins is already used by many people. Now everyone liked Defi projects and I think the faster the technical development of Defi takes place, the more people will use these coins.

It's too early to speculate yes it is popular now but for how long so many DeFi projects are now existing let us see first how the industries and investors will adopt if this happens I think it will take a lot of time, banks have been here for a very long time and it's been one of the biggest contributors in our modern world.

The most important thing is creating a debt, when you have a debt, you can build over it many financial instruments. But now we are in the phase if we can really create debt in this way.  ;)

At this point, I just saw DeFi as a way to get higher interest than the way we save money in conventional banks (based on DeFi project OP mentioned), specially this month when DeFi coin pump and make the price overvalued.
Whether in the next few years it could happen even though at this time it still looks impossible.

Hopefully. I mean if things go smoothly i dont see why not. If this DeFi hype can stand up to the expectations of those who hype it, it can achieve that if it aims to. It is a possibility if they aim to get more people involved.

Decentralized loans will never work in my opinion because people won't pay back the loan amount for sure so this is only hype created with the name and nothing more. Traditional banking system can be replaced only if the wealth inequality becomes lower and this is possible if people invest on the right cryptos in the early days.

it could threaten the traditional banking system to the point of replacing it all together or it can also influence a restructure in current systems to adapt to this new concept. In any case we might still be too early to tell.

I doubt that.
It's not just about loans and savings.

Acceptance by the public is also a must.
And then, there is the government and of course, banks will fight bank.
Creating their own, de-fi or maybe just digital cash which they already have with their plastic cards.
Which continues to another things.
Shops acceptance. Yes I am now banked because of De-Fi but how will I use it without shops accepting whatever they will use. i.e. QR code or still plastic cards.  ;D

Maybe, its not far off the possibilities. If things go well, why wouldnt they venture on something bigger? If they could live up to the hype theyre on right now, that would be nice and if they could reach something bigger, that would be great.

DeFi may be increasing its popularity nowadays but it's still way too far to reach or even replace traditional banking. We are seeing the hype with DeFi but the recognition is still limited mostly among crypto space. Although we are not sure whether this hype will remain for a long time, it will be hard to replace the traditional since the majority are still relying on the banks.

But honestly, DeFi does not really need to replace the traditional bank as long as DeFi is getting recognized and be able to do its purpose.

The hype drives people to come up with ideas that are too far from reality, they always think big things they have been deceived by a trend and by the whole community but the essence of the hype is such that, the rapid pumping and popularity then end in silence and slowly. So I can only say that DeFi has done a good job of it, creating value for investment in the community, considering the replacement of traditional banks, talking about risks and advantages, DeFi is just a small spark while the bank is a lot of volcanoes

Of course, “De-Fi” applications have become very popular, and they are growing and flourishing day after day in a big way. The spread of the Corona virus in the world has contributed to the rapid acceptance and spread of these decentralized applications that depend mainly on cryptocurrencies and decentralized financing, but I think it is too early to judge De-Fi replaced the old banking system, it will have to go a long way before then, because this old system is able and difficult to replace easily, especially because the world's governments do not accept cryptocurrencies yet.
We will have to wait a while until we see results or replace members of old governments with a new generation that is more open to technology and cryptocurrencies.

DeFi projects, providing services for loans, credits, the issuance of interest on depository, thanks to smart contracts, began to perform the traditional functions of banks and therefore, of course, they will press banks in this. However, one can hardly expect that all people will use only these services. A certain part of people will use the services of banks for various reasons. Therefore, I think that the services of DeFi and banks will exist in parallel.

Replacing it still seems far especially in my country were fiat is very much needed in different transactions and stores since most people here didn't want to adopt change, the online banking only just made popular only these time in my country. It will depend on what country will adopt DeFi, those advance and open for crypto and blockchain can replace their bank or partnered with their bank as their more on online transactions now. Maybe once it became too hit and successful in other country, that's the only time will  be able to think of adopting.

During these times Defi becomes well known and starting to be popular because of the hype happening to this project. Yes they offer good services like loans but in my country having this services to replace bank is impossible. It needs first to adopt crypto since mostly here doesn't know yet this kind of technology. Maybe in other countries that already adopted Blockchain technology. The traditional banking here is very important to the daily lives of the people.

That's why many investors are coming into DeFi projects because of a higher interest and its hype right now but its not enough reason to replace banks since banks is not just about the interest, they offer many services that until now is very useful.

DeFi will not replace banking industry as if the bankers will easily give up their company well in fact they already adopted blockchain technology that can help them deal with the growing technology, so if DeFi's goal is to replace traditional banking, then its long way to go.

You really do not need to wait for an unforeseen future to understand this, nothing is going to replace the baking system. Why is everyone imaging things that is not even possible in the near future, there are countries banning the entire technology and some are extremely confident that these could replace traditional banking which is a joke i am hearing for a very long time from members who does not have a clue about finance ;D.

Agree. So far, De-Fi has a long way to go before it'll be able to replace banks anytime soon. There are a lot of flaws which make De-Fi apps vulnerable to external attacks. I guess that the De-Fi industry is not as mature as I thought it was. Smart contract platforms like ETH and EOS would need to focus on security in order to make De-Fi as robust and resilient as possible. Besides that, developers of De-Fi apps need to verify everything is in "tip top shape" before launching them to the public. The less flaws De-Fi apps have, the higher their adoption will be in the mainstream world.

As De-Fi promises to give "banking to the unbanked", I think it will totally revolutionize finance in the future. The industry might challenge banks worldwide, as De-Fi becomes used more thoroughly by everyday people. At this point, banks could pressure governments in order to enforce heavy-handed regulations to stifle the growth of De-Fi. In order to prevent that, De-Fi needs to become fully decentralized by relying on decentralized infrastructure (decentralized exchanges, IPFS, etc). Only that way, De-Fi will become extremely resilient against government intervention.

In the end, De-Fi might only become an alternative than a true replacement of banks. That's largely because banks still dominate the world's economy. As long as governments rely on central banks to issue Fiat currencies to the world, De-Fi won't be going anywhere. It's best for the industry to "stay as is" in order to let people decide from one type of banking system to another. Just my thoughts ;D

It will definitely challenge and compete with the traditional banking and finance in a few years time but we will have to see the impact it creates and how the world reacts to it especially the regulators before we can conclude that they will completely replace banking.

DeFi projects definitely have the potential but i think there is still need of massive support infrastructure, smart contracts, blockchains and products that will complete the defi ecosystem and develop it into something for the common man and at the same time the world will need access to quality internet for cheap and then the masses should be able to make use of all these defi products and services but all this process can take many years.

The rate out which scammers have invaded Defi same as they did to ICO is really becoming alarming and I have it survives and do it's great work in crypto. I have seen coins pumped from 100$ to 0. And some from 50$ to 3$. I know everyone has the right to make choices of what to trade but the way Defi is going I hope it doesn't end like ICO.

This happening all depends on how successful the blockchain industry will be in the future because without the blockchain technology becoming a force non of the new innovation will matter. DeFi are spectacular but do you really think they can keep the momentum that high until everyone is ready to used them?. Anyone remember what we all thought about the ICO era saying it'll replace traditional crowdfunding system but that has failed.

Not trying to say DeFi will fail too (I wish it won't because it's a nice concept that'll be beneficiary to the massive) but we shouldn't be too quick to used new trends to compare with old ones that have served us for years, gaining the trust of the masses even when they're not worth it. DeFi innovation is still new and needs time to better itself but until then, the traditional system still has a higher advantage over DeFi.

Replacing traditional banking will initially require mass adoption  from all around the world where even haters start to love and believe in crypto. I believe that DeFi has already played a big role in bringing back the attention of mainstream towards crypto once again, where the centre point of attraction were coins which did more than 3000x in less than a month, excellent! Anyways, I can't say that traditional banking will be destroyed completely but yeah, if everyone becomes a fan of the crypto ecosystem then definitely, there are people who will stop traditional banking once and for all.

Agree. De-Fi still needs time to improve itself. I believe that we're in a hype phase, as new De-Fi dApps emerge like "hot cakes". Eventually, flaws will be discovered (like the case of YAM.finance) urging the need to improve smart contracts providing De-Fi services. So far, the industry is way behind traditional banking in terms of performance and mainstream adoption. Either developers continue to work hard in order to make De-Fi better over time, or leave it as is. The hype cycle similar to the one in ICO's early days, might come to an end after the demise of the COVID-19 pandemic. Given that De-Fi is still not mature for the mainstream world, it cannot replace traditional banking as we know it.

All in all, time will tell us if De-Fi will be a "flawed experiment" or not. There's a possibility that governments will regulate the industry more thoroughly as they did with the ICO craze. If that happens, De-Fi app developers might be subject to comply with those regulations in order to launch their dApps to the public. After that, the growth of the industry will diminish until it's non-existent. Just my opinion :)

In a way it makes sense that DeFi does yet stand a chance against traditional banks, even with their lending platform services. However, one thing I'd like to help you maybe change your idea of DeFi is to think that this is still in its early stages and who knows from now with so many alts being developed one day you might be able to buy anything you want through DeFi. This is of course, extrapolated but not completely unfeasible given how quickly this new finance system has spread.

It is too early to say domething like this, let defi projects prove themeselves first, let the business model succeed. Some critics point out that these defi projects will not be sustainable so lets see how they go for next 2-3 years. If everything goes well then definitely defi can vompete with traditional banking but i think it will be a long and bumpy road ahead.

these are things that will not happen. Traditional banks have more functions and uses than DeFi.

the process of borrowing or saving money/assets is still very much needed and DeFi does not have such a function.

in the future, DeFi and traditional Bank will work equally well without turning off each other.

A long long way to go for DeFi to replace traditional banking. We may not even see that situation in our lifetime. Traditional banking will survive for so long because even if a lot of people are going digital, still more of them are keeping themselves in traditional way. It is like their safe haven even if we are advancing in technology. Up until now, the percentage who are into crypto is small as compared to global population. So going DeFi, their clients may increase thru the years. But the trust is still on these traditional banks.

It's still early to make conclusions / predictions. DeFi is currently being hyped – almost all new projects are DeFi related while the older ones now supports DeFi related features on their platform in order to stay relevant. Despite this, we have to wait and see how DeFi holds up. I remember ICOs and IEOs were hyped as much as this but not anymore now. When the hype dies down, that's when we'll be know the true potential om whether or not it'll continue to stay relevant.

Right now, DeFi is a long way from replacing the status-quo.

It actually has the capacity to take the place of the old ways of doing things in the space.
DeFi ensures there is more decentralization than what was and is obtainable with most projects. Those that will be able to stand the test of time are the ones with good tech and most needed in the industries. There is need for multiple oracle feed by both crypto and traditional finance. Most Oracles have integrated DeFi, a clear indication that it has come to stay.

What people need to know and understand is that, traditional banking system will always exist so far as fiat currencies still exist. Also, government all around the world will always prefer the centralized system rather than a decentralized system where they have no control of how transactions are made on the system. So far as they prefer centralized systems, traditional banks will always be in the financial ecosystem.

At the time like this, I don't think this can replace the traditional banking, The hype is so much that's why the hopes of the DeFi supporters is really high and creates a possible situation like this to give more charcoal to the fire. I'm not saying it's not possible but we know that traditional banking is well established and DeFi thing is new and this would take time for DeFi projects to catch up and to gain masses for it to fully replace traditional bank, For now, it is more logical if we ask the question "Can DeFi be on par with traditional banking?". We know that the majority of people is scared to try new things, It is the same as bitcoin, People doesn't really want to try it out because they are scared of trying something new and given the fact that bitcoin is on its 10th year now, The majority of the population hasn't tried or never heard bitcoin. This can also happen in DeFi.

Basically I think No Traditional banking will be here as far as fiat is been used, from the look of things I will say not many people are using crypto in large scale and there is also countries policies and restrictions So maybe when there are major usage in large communities then we can talk about effect of defi on traditional banking system

collateralized loans are good start, there are some start up projects where you don't have to put 2x collateral to get a loan. Pretty sure what you are saying will become reality soon enough.

I don't know if that will happen in the future or not. The Defi Baru project operates in the cryptoqurrency industry space, if taken from the negative side that there have been 2 Defi projects that ended in scams, for example YAM & UBI. So, I think it's too early to say that the Defi project can replace the FIAT currency.

Hopefully that day is not far off.This backing system will no longer be extended.People are transacting day after day for their easy availability.They are giving more priority to online base transactions.This makes it much easier to do a simple transaction than a backing transaction.Defy will make the transaction much easier. Hopefully.

It can happen i believe nothing imposibble nowadays, sooner or later all the system will be change from the traditional banking like now change into the blockchain as soon as possible or all the bank will left behind
People should adapt new system before get left behind ofcourse some bank will fight with all the crypto world, blockchain or DeFi
But time move so fast we have to change and all people have to accept that

DeFi still has a long long way to defeat the current financial institution because it's still a fairly new concept but, if the DeFi keeps booming the way it is now then I say why not in the next few years DeFi can definitely replace traditional banking.

My opinion is that we aren't anywhere close to defi replacing traditional banks . We are still waiting for bitcoin and other crypto to be used as prominent payment methods.

This DeFi project will only last for a while, it can be said that it is like FOMO because it will be trending at this time, I am sure that in the future DeFi will not have a good effect anymore because there are no investors who provide support anymore.

Defeat can, but replace Im not sure. Traditional bank has always been part of every country. Yes cashless through cryptocurrency is very efficient means especially right now but defi is a new concept that has been introduced lately. I know it may be hard to implement this and explained clearly on the community on such ease that they can grasp it. But I am looking forward for banks to adopt the blockchain and stop refusing its technology, cause be honest it will ease every transaction. The only concern here is the tax system wherein blockchain is not really into it. Though its required people kove decentralized.

Defi need to create some insurance funds, so that users have more confidence in the system, so that there is no risk of losing everything

I don't think so, because the traditional banking system is widely used, thats why it's not that easy to replace it. and I don't think that the banking sector well remains the same in the years to come. I'm sure they will innovate to be able to compete in the Decentralized finance (De-Fi) alternatives. As we have seen today some in the banking industry was already embracing the Blockchain technology in my country commercial Banks was already adopting the Blockchain technology so it means that it can be used both the traditional and present system if we want too.

There's already DeFi insurance project that focus on smart contract security like Etherisc^[1], Nexus Mutual^[2] and Opyn^[3]. I believe too that insurance is a must on DeFi since all funds of investors are placed on smart contract which has a risk for potential potential bug like what happened on DAO. DeFi is the real threat to banking system and I believe they might
be adopt by banks. Replacing banks is a bit delusional because they are not idiot to be left behind.

[1]https://etherisc.com/
[2]https://nexusmutual.io/
[3]https://opyn.co/#/

There may be 2 options, including the bank will fight to prevent the legality of De-Fi or the bank will adopt De-Fi in its system
the fact is that we cannot resist technological developments for the sake of financial advancement so De-Fi will still have to replace traditional banking
but in my opinion most likely traditional bank will adopt blockchains system, De-Fi to get bigger profit

risks were and always will be. any person who invests in cryptocurrency understands this. Even if the project has some kind of insurance fund, the risks  still will be

It's actually possible to have Defi tokens replace traditional banking but that would be in the distant future. Cryptocurrency  may one time be recognised as a better alternative to traditional financial tool, but it would take a while for us to get to that stage. A lot has to be put in place before cryptocurrency can have its way to traditional finance or banking.

This is a tall order you mentioned. This could happen but it will take a very long time. First internet needs to get to everyone. As everyone start getting tech savvy then stories like you mentioned will start making sense

Who knows its future, it could crash and die at any time if there are too many scams. Looking back at the 2017 ICO, many were hoping that it would change the market and help Bitcoin go up to $ 100k. But soon the ICO crashed and became a scam. Defi is just a trend and I believe it will be extinguished quickly over the next few months

DEFI can't replace traditional banking in future no matter the level of success. We all know the challenges faced by crypto/blockchain projects, hence general acceptability by centralized authorities will be a problem. DEFI has a long way to go, this is just an initial stage and we hope it doesn't become extinct like some other trends in future. I'm very optimistic with the progress of DEFI projects seeing what is achieved already, but replacing traditional banking will be a hyperbole.

just because there is a financial on its name does it mean it solves financial problems or related to it ? hmm i think no . we dont even know if how long this will last  .  if their fame is only for temporary purpose , people will still going bank on traditional banks  .  one more thing , btc and crypto are also said to replace banks before but that didnt happen  . infact btc/cryptos are still famous till now and they are much better than defi imo .

Defi project moves crypto to the next level by giving crypto enthusiasts the opportunity to use crypto as finance instead of a fixed account and despite the huge potential of DeFi,, we still cant say DeFi will replace traditional banks because the government stance against crypto will play a huge role. However, i don't expect the institutions to just watch Defi taking their position.

DeFi is getting more popular and as time goes on the popularity will be more than this and it will attract more and more investors, and of course I was expecting people to start asking questions like this , whether they will replace the traditional banking. It’s just like when Bitcoin was getting popular everyday, a lot of people started asking questions whether it is going to replace traditional banking.

I think people don’t understand these things. These DeFi/crypto are something else, am alternative to the main system that can’t be changed. They kind of provide you with other means to do something in another way, and we should understand that.

i do not think that it is possible for DeFi to replace traditional banking, it will certainly be there for P2P lending and borrowing, but it is a huge industry to be substituted with self-governed DeFi project, maybe banks will include some variant of DeFi infrastructure for people to lend their money from their accounts through bank infrastructure, but to let the whole industry go, i do not believe in that scenario

It would be smoothing to have Defi replace traditional banking services, but that would be very difficult to accomplish. As it stands cryptocurrency is barely recognised as a legal tender in several countries which makes it difficult for holders to utilise it for offline transactions. The adoption of cryptocurrency would be a great boost to having Decentralized finance replace traditional banking.

I would not talk about replacing the banking system with the Defi ecosystem.
Blockchain technology allows you to openly store useful information, and you can be sure that it will not be changed, so there is no need to waste time checking the data.
The Defi ecosystem already operates as a banking system, but it requires collateral in the form of stablecoins or other cryptocurrencies.
The banking system will undoubtedly change, but it will find ways to parasitize on society.
The only way out is to build an alternative system so that you can pay for everything with cryptocurrencies.

Or impossible to accomplish, banking system been for a very long time and it's been regulated well by the government, there's no way it will be replace to something that is decentralized which our government has no control or interest.

That's a good reason, bitcoin needs to gain massive adoption, then we can talk about replacing traditional banking.

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 ;D

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.

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.

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.

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.

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

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 :)

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.

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.

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 :)

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.

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.

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 ;D

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?

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 ;D

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

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.

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  .

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 ;D

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.

I don't think DeFi platforms would replace traditional banking in the future because the government owns and regulates the banks, and it has been existed years ago. But DeFi platforms are good as an alternative of the traditional financial system to keep our assets safe from further collapse that is proven this year of 2020 that it doesn't have been affected in the pandemic of the corona virus.

There will be always people, who never trust any new technologies and payment systems. DeFi is not known to the majority of people. I doubt that it will ever replace traditional stuff. It will make the life of people, who deal with it, simpler, and probably, more comfortable (for them).

In addition to the habit of using traditional banking services, most people do not have the skills to use cryptocurrencies. This sector of DeFi was created specifically for those who appreciate the possibility of anonymous use of financial services and understand its differences from the services provided by banks.

DEFI projects will not be able to replace banks because they are risky and not strictly regulated by law.
Also, DEFI is not stable in liquidity, people invest for profit, and that accidentally destroys projects.
DEFI will be a trend in the future, but it needs stability to play its role well. I find the bank more stable and safer than DEFI.

How many times crypto related "things" tried to be a part of banking sector? Exchanges that issue cards, XRP, everyone that promise cheap and quick transactions. All these stacking things that tried to act as a bank investment plans and many others. Why someone think that DeFi will replace banks? Lets wait first for cryptocurrency mass adoption, and only then talk about replacement.

Nothing will replace banking. They will evolv to be modern enough but will never be dead

Traditional banking offers offline and online transactions, they are way better than De-Fi in the eyes of many people, plus they are back by the government, that is why we have a central bank, an agency to oversee the banking industry. De-Fi is good but it's too early to tell and the word "replace" is quite ambitious for a new platform, it's like taking down the banking industry.

DeFi is a barrier-free pathway for financial institutions to the widest range of financial inclusion.
DeFi is real proof of blockchain and smart contract technology. However, because it is still in its very early form, misuse of program code is possible,
which can have fatal consequences and trigger public distrust.
This means that there are still many big challenges facing DeFi if it wants to replace traditional banking in the future.

That's certainly true, mate. Most people are wary of trying something new. They believe that what's new is very risky to them. But sometimes, we need to take risks in order to explore new opportunities that only comes in a lifetime. "De-Fi" is a great opportunity to enjoy all the benefits of traditional banking without banks. The unbanked will find "De-Fi" to be extremely useful in their daily life. While I have to admit that "De-Fi" is extremely hyped right now, it still has the potential to take the world by storm. During this hype phase, it's expected that scams would appear every once in a while. But as time goes by, people will be able to difference the good projects vs the bad ones. The industry just needs a little more time to mature. Until "De-Fi" gains performance comparable to that of traditional banks (VISA, Mastercard, PayPal, etc.), it won't be able to replace banking anytime soon.

Even after "De-Fi" matures, banks will still be relevant in the future as governments depend on them for the management of their own national currencies (Fiat). As long as banks dominate the economy, the won't be going anywhere. "De-Fi" will grow alongside banks for the foreseeable future. Needless to say, the crypto/Blockchain space will be able to survive with or without "De-Fi". If the concept of borrowing/lending via smart contracts powered by Blockchain technology works, then most "De-Fi" platforms will be here to stay. Otherwise, crypto will move on as usual serving its purpose of providing an alternative to the existing monetary system. Just my thoughts ;D

Most governments will definitely limit this, moreover, DeFi is not something the government can fully control. As you said, this will only be an alternative, not a substitute. Although the system is better, there are some people who doubt it because it is mostly anonymous, so they think it is less secure.
And trust in a system of burdens with government oversight is considered safer. Well, this is just a matter of taste, the important thing is we can use it wisely and take advantage of it as possible.

That's certainly true, mate. The fact that "De-Fi" has no middleman and it's anonymous, scares away many people in the mainstream world. After all, the average person is looking for something that's backed by a trusted entity. It's this reason why "De-Fi" won't be able to replace traditional banks anytime soon. At least, the industry will find it's own way among the unbanked people using crypto in the mainstream world. You can leverage the benefits of both banks and "De-Fi" in order to maintain a steady financial life for years to come. I believe that "De-Fi" will prove to be a nice alternative to banks in times of need. With attractive interest rates available on "De-Fi" platforms, who can't resist spending money on them?

As long as "De-Fi's" legitimate use cases are expanded in the mainstream world, the industry will be here to stay for many generations. In their early days, expect a lot of hype and scams going all over the place. But wait a few more years, and you'll see a mature industry that's supported by institutional investors and serious traders alike. Ultimately, banks will prevail as they dominate the world's economy. And there may be nothing we can do to stop them. At least, crypto/Blockchain tech will be here to stay for many generations. Just my opinion :)

We should not overlook the banks from the accounts prematurely. The market for decentralized Finance only looks so simple, clear and accessible. Let's dig deeper and see what's wrong with DeFi.
The main problem is the security of providing loans. As mentioned above, hundreds of new DeFi tokens appear on the market every day, which disappear just as quickly. Here, for example, is the Yam token, which lasted less than a day, and investors have already managed to buy a dummy coin. If you look at the root of the problem, more than half of the DeFi tokens will leave the market before the end of the year. And in the next five years, there will be less than a dozen truly worthwhile coins. By investing in DeFi tokens today, you run the risk of running into dummy coins and losing your savings.

I doubt that it can substitute banking (traditional). The number of people that now work with cryptocurrencies and even live for crypto is huge (millions of them). But it cannot be compared with billions of the rest guys, which are so far of these things that it seems they will never use anything of this sort. Banks for them are the best decision.

Everything that cant be controlled by the state is a threat to it, therefore, with the strong development of defi and the pushing back of the centralized banking system, the government will try to suppress this development by any means, laws will be created prohibiting the use of cryptocurrencies and similar measures. Therefore, the scaling of cryptocurrency and defi is inevitable, but I see use as a daily national currency only in countries with hyperinflation.

Sadly, this will turn out to be the fate of "De-Fi" and crypto in general. Governments will eventually restrict the use of crypto, as it becomes a threat to the existing monetary system. The average individual will be forced to use traditional banks, as crypto will be deemed illegal. Still, it'll be possible to use crypto "under the radar". "De-Fi" provides many services offered by mainstream banks to the unbanked person. Behind the scenes, the crypto economy will flow as usual regardless of government restrictions worldwide. Since Fiat on/off ramps will no longer exist, people willing to get access to "De-Fi" will have to acquire cryptocurrencies "under the table". The only way to achieve this would be via P2P trading platforms or by performing an in-person exchange from Fiat to crypto or vice versa.

As far as "De-Fi" replacing mainstream banks go, I don't think they'll be able to do it is as long as governments and central banks dominate the economy. They're still too powerful to take down anytime soon. Despite Blockchain tech's recent advancements, Banks are still relevant financial institutions in the mainstream world. My guess is that Banks will adopt Blockchain technology to use it for their own benefit. I'd imagine they'd create "De-Fi" platforms of their own that are utterly centralized (becoming "Ce-Fi" as we speak). Banks have nothing to lose by creating a system they can easily manipulate and control to their hearts' content. Truly decentralized finance platforms will survive in the long run, but they'll remain as an alternative than a replacement to Banks. As long as "De-Fi" works as intended, there should be nothing to worry about. Let's focus on helping make Blockchain a better place instead of focusing on replacing banks altogether. Just my opinion :)

DeFi projects can distract some of the clients of traditional banks.  However, banks are still not going anywhere, since they perform many other useful functions and, most importantly, they are supported by the state.  And a significant part of citizens will traditionally trust more state banks, which are protected by the state.  DeFi projects take a lot of work and time to gain the trust of citizens.

The scam defi will disappear but the legit defi has a lot of potential to replace the traditional economic system. As fa as i can see if people can get flash loan and they can also get interest from their money that already locked in the defi platform. You can't even get a lot of interest when you are putting your money into the bank or something else.


Defi gives very good interest based on the % of loan interest.

You don't invest on bank, you just put your money for safekeeping and you'll earn a little interest, that's different from investing in a DeFi projects where the risk is high, so the reward is also high. Banking system will continue to dominate, traditional banking as its name because people get used to it, so I don't think De-Fi will replace that traditional banking when even 1/4 of the total population does not even know crypto.

Good point. "De-Fi" could never replace mainstream banks if they rely on volatile cryptocurrencies to survive. Still, stablecoins provide the goodness of Fiat into the crypto/Blockchain space. But it's not enough to rival banks' prominence in the mainstream world, as they're too big to fail. As long as governments rely on central banks for the issuance of Fiat currencies around the world, "De-Fi" will only remain as an alternative than a replacement. At least, the unbanked people will be able to enjoy all of the benefits of mainstream banks without the need to verify their identities. You and only you are the sole owner of your funds in "De-Fi". That's the beauty of crypto/Blockchain tech. If Bitcoin didn't came into existence 11 years ago, none of this would've been possible.

Nonetheless, time will tell us if "De-Fi" platforms will be here to stay. As long as developers, and individuals collaborate on making "De-Fi" a better place, there should be nothing to worry about. With the ever-rising number of "De-Fi" platforms providing lending/borrowing services to crypto users, it seems to me that the industry will last for long. The hype will end for sure, paving the way for truly-legitimate "De-Fi" projects in the crypto/Blockchain space. Who knows? Maybe "De-Fi" will be able to live alongside mainstream banks in the future? Just my opinion :)

Many 'DeFi' tokens have been released and gone because users have known the risks and were liquidated in keeping positions in these tokens whether marginal, futures or spot. I don't agree with OP and think that DeFi will not replace anything, but will get replaced by something new like ICOs and IEOs got replaced by DeFi trend.

I don't think so because they will just take the concept, like digital fiat money that has started to take effect in several countries around the world. but who knows, maybe crypto will become big and be used later in the future. if that's the case then defi will take over.

For most it is true as it is basically a pump and dump scheme for most projects and now everyone is renaming their project as Defi projects as they know it has become a catchy name to attract the investors and many of the dead ICO projects are renaming their project name and adding Defi and relaunching them again and i have seen a few projects like that.

Defi nor cryptocurrency market is replacing traditional banking :P.

I highly doubt there will be a future where the average person will directly interact with Defi, people are scared of new things and many will like to see a human face when signing up for a 20 year mortgage or business loan. Not to mention that people like banks because banks offer stability

Doubt. De-Fi even as of now already fading out its hype, replacing traditional banking is not an easy feat and even thjere's numerous attempt of highly innovative platform trying to replace our traditional banking and most of them fail.
People already used to how the bank works and most of them aren't really welcoming to new things as it's involving their money.

Bank also still frequently used to buy or sell crypto and that alone already make it relevant enough to keep existing for centuries despite crypto rapid growth.

I am not saying it will replace banking, but still there is a chance, because banking system is so fake. In my country there is person who put 2million dollar in his account and suddenly its dissappear because the fund is stollen by bankers. And when that things happen you will not get your fund fast. It will going through lawsuit or something. Takes time to get your fund.

That's a problem with corruption, there's no guarantee that Defi can or will solve that. How many of these ICOs and new tokens will rugpull in the coming weeks/months?

How sure are you that all De-Fi are not?  I really like the idea of De-Fi, but the problem is that, it can be easily exploit by the founder himself , if his intention in creating it is ill.  Let us be in reality here, De-Fi as far as I know is created to be an alternative for banking and not to replace it.  Aside from that, authorities will never allow such uncontrolled system to replace the one they have a full grasp.

Thats the risk of storing your funds in bank. Such scenario is possible to happen and worse is you'll be having a hard time taking your money back and it might take a long period.

On the other side Defi (just like the uses of crypto) has a chance to take over but only to those who believe in this system. For people who used to bank this can be hard to grasp specially if they're not open for the new technology. Thus they might still chose the traditional way to store their assets.

I think that's all De-Fi in the future they cannot compete with banks as they simply have more power and are supported by governments. So I think that it will not get very much popularity only and banks moreover do not stand still.

Sadly, this is the case with new trends in the mainstream world. Scammers quickly take advantage of the situation in order to run away with people's money. This damages the reputation of "De-Fi" as we speak. The decentralized nature of crypto/Blockchain tech allows anyone to do what they want without prosecution by a central authority (sort of). With "Ce-Fi" (centralized finance), that's not the case since the industry is largely regulated by mainstream governments. It's evident that scams are less frequent here on "Ce-Fi" than on "De-Fi". As long as this is the case, "De-Fi" will only remain as an alternative than a replacement of traditional banking.

Nonetheless, it seems to me that "De-Fi" will find its own place in the mainstream world. People who are unbanked will most likely resort to "De-Fi". This emerging industry provides many benefits that are too hard to ignore. With the use of stablecoins, the possibilities are endless. Lending or borrowing in a decentralized manner proves to be extremely convenient for everyday people. Yet, "Ce-Fi" provides greater outreach due to its widespread adoption in the mainstream world. For different purposes and/or needs, will be the type of platform to use (either centralized or decentralized) for banking services. As long as "De-Fi" remains decentralized, nothing else matters. Just my thoughts ;D

i have real doubts that defi could replace traditional bankunbg system at least because defi is definately other concept and will face a lot of transformations in future. as for now i'm using defi as an investment toll with nice returns

Before we talk about supplanting the conventional monetary system let them begin being operational and really give this such a huge amount of discussed decentralize monetary operation to individuals, let individuals utilize the administration and maybe give a positive review, since all I see for the present is simply hype and price pump, no down to earth utilization for the time being which will be the central issue to be viewed before any further discuss substitution

totally agree with you, i'm also believe in defi, it's more credible concept than ieo and ico. i prefer to invest in dex-es, i believe they will be next to centralized exchanges

With so many defi getting hacked news I think not, however there are lots of room for improvements so time will definitely tell

Well, DeFi can't replace traditional banks, but it will definitely eat their lunch in many areas.

btw recently found an interesting stablecoin exchange - xsigma, did you know smth about it ?

yes heard about them, they are baked by a public company and as i know they have nice returns for LPs

Well, "De-Fi" is far from replacing banks anytime soon. The tech is still not mature enough for mainstream use. Even if it were, "De-Fi" won't be able to catch up with banks due to its limited adoption in the mainstream world. Banks are too powerful to go away even with the inception of crypto/Blockchain tech. As they get closer to adopt this revolutionary technology, "Ce-Fi" (centralized finance) will become bigger and stronger than ever. Because of this, I believe that "De-Fi" will only remain as an alternative than a replacement to traditional banks. I wouldn't worry about this as long as "De-Fi" works as intended. It's all about providing banking services to the "unbanked" people in a decentralized manner. "De-Fi" achieves exactly this by eliminating the middleman from the system. It may have its caveats, but it's bound to improve over time as the Blockchain space matures.

Nonetheless, there's no denying that "De-Fi" replacing banks is a dream. The only way it will become a reality is if central banks collapse in their entirety. But knowing that governments heavily patronize these financial institutions, it's very unlikely it'll happen anytime soon. Instead of focusing on replacing banks, let's work together in order to make crypto land a better place. As long as people have an alternative or "exit route" from the current monetary system, nothing else matters. Just my opinion :)

I don't think that DeFi will completely replace traditional banking in the future but it may take part of the market. common users will benefit from competition between these two financial spheres.

I fully believe that DeFi will one day take on that position as a traditional banking process. Because of the way DeFi  is providing banking facilities and accelerating the transition rate at a large rate. In more detail Decentralized Finance is a newly added system where overall trading is the name of faith.