Disrupting Foreign Exchange Market: DeFi Reveals Multi-Billion Dollar Use Case | CryptoGazette - Cryptocurrency News
The DeFi crazy is gaining more and more popularity these days, and things continue to go great. The latest moves are presented below, and we suggest that you take a look.
The foreign exchange market is a multi-billion dollar use case for DeFi
It’s been revealed that Shark Tank star Kevin O’Leary said that the foreign exchange market is a multi-billion dollar use case for DeFi – a form of blockchain technology that supporters are claiming can revolutionize financial services by eliminating the need for intermediaries.
The online publication the Daily Hodl notes that during this year’s SALT conference in New York City, O’Leary relates how investors must rely on foreign exchange middlemen to invest in overseas markets.
He said that there are extra steps required in such dealings which are often unnecessary and burdensome.
“Let’s say a traditional mandate, such as I want to go long Europe, I’m going to buy 50 stocks. I have to buy Swiss francs, Euro-based stocks and British pounds because I want to trade them on their domestic exchanges.”
He continued and explained that “In between me and that transaction is what’s called the bane of the earth – the FX trader, the currency trader who clips me every time I buy and sell. Adds zero value and sucks friction out of the system.”
It’s also important to note the fact he believes that DeFi has the potential to eliminate costly middlemen from the foreign exchange market system.
“This is where DeFi can take us, on just one use case.”
DeFi refers to a network of decentralized, non-custodial financial contracts that concentrate on lending, yield farming, crypto derivatives, and other products.
DeFi enables ordinary users to engage in a vast financial system without third-party intermediaries like banks and other financial institutions. However, according to Chainlaysis, larger traditional institutional players have been paying increasing attention to DeFi, and this trend was most noticeable in CNWE’s crypto division.
Stay tuned for more news.
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