Decentralised finance (DeFi) could be the most effective way to increase economic freedom, which in turn would accelerate the pace of innovation and improve the lives of billions of people, Bitcoin.com’s chief executive has said.
DeFi – a system by which financial products become available on a public decentralised blockchain network – is open for anyone to use, rather than going through middlemen like banks or brokerages, and does not require proof of identity.
Adopting this can lead to a more inclusive economy, including promoting the ease of doing business, free trade with other nations, regulation of the labour force and stability of currencies.
“A decentralised and permission-less everything is the most effective way to help economic freedom. In places with more economic freedom, people have a higher standard of living and are happier,” Roger Ver said at the Fantom Developer Conference in Abu Dhabi on Tuesday.
Evangelists of DeFi argue that it is a safer way of maintaining assets and conducting transactions, and it has been seen as a scenario of a world without banks.
The DeFi market owns only 5 per cent of the cryptocurrency space, but is growing. CoinGecko data shows that there was $93 billion worth of DeFi assets as of June 2021. As of Tuesday, it was up 66 per cent at $154.9bn.
However, Changpeng Zhao, the chief executive of the world’s largest crypto exchange Binance, recently said that cryptocurrency regulatory frameworks could take “decades” to implement.
The International Monetary Fund, along with governments and other global organisations, said it is looking at both the risks and opportunities that digital currencies pose.
Countries with a higher standard of economic freedom enjoy several advantages, including a flexible market structure that attracts more investment, higher per-capita income, life expectancy and literacy, improved environmental protection, fewer wars and conflicts, higher self-reported happiness and less corruption and bribery.
In Heritage.org‘s 2021 Index of Economic Freedom, Singapore is ranked first with the UAE in 14th position. In a recent Brand Finance report, the Emirates came ahead of the US and UK as one of the “world’s strongest nation brands“.
The UAE offers its people more control and has a good track record. It is on track, if it hasn’t been already, to be among the Tier-1 cities to lead humankind in the future
Roger Ver, chief executive of Bitcoin.com
Starting a business would also be easier with DeFi, but Mr Ver advised to do it in a country that is “welcoming and friendly” to this sector, such as the UAE, which he says, has “rolled out the red carpet” for players in the space.
“The UAE offers its people more control and has a good track record. It is on track, if it hasn’t been already, to be among the Tier-1 cities to lead humankind in the future,” he said.
DeFi also offers higher returns, with interests “north of 10 per cent” compared to traditional lenders, he said. “I’m crypto-agnostic; anything that works for me is good so let’s all work together towards more economic freedom.”Internet Explorer Channel Network