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How DeFi is Changing the Financial Landscape

| Dec 06, 2021 |

Bitcoin and other forms of cryptocurrency have been a hot topic as the new alternative to the dollar but, according to Campbell R. Harvey, PhD, Duke University professor and research associate at the National Bureau of Economic Research, decentralized finance (DeFi) is flying under the radar and could prove to be much more beneficial to the average consumer.

In a Gabelli School Centennial Speaker Series event sponsored by the CFA Society New York, the Gabelli Center for Global Security Analysis, and the Museum of American Finance, Harvey discussed how today’s financial landscape is in the midst of a reinvention—also the subject of his book DeFi and the Future of Finance. He explained how the blockchain-based form of finance that doesn’t rely on brokerages, exchanges, or banks could thrive alongside the centralized financial system and offer peer-to-peer lending as an alternative to borrowing from traditional banks. Banks’ savings rates are low and lending rates are high to fund their infrastructures, employees, and security, but in a DeFi system, this is completely cut out, yielding higher savings.

“There are very few things that economists agree upon,” he said, “but one thing they do agree on is that anything that reduces transaction costs is a good thing for economic growth, and we need economic growth.”

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