Will "De-Fi" replace traditional banking in the future?

[Abiky]

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.

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

[BitcoinPanther]

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.

[lixer]

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.

[Abiky]

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

[rexxarofmoknathal]

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

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?

[Abiky]

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

[amiraja2]

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

[lienfaye]

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?

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.

[imstillthebest]

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?

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  .

[Abiky]

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.

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

[Ozero]

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.

[Kong Hey Pakboy]

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.

[bitcon]

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).

[tvplus006]

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?

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.

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.

[noorammak]

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.

[TopTort777]

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.

[mariah.sadio]

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

[Questat]

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.

[koang]

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.

[Abiky]

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).

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