After Bitcoin, the DeFi bull run? Kraken CEO: „DeFi is eating up the financial world“.
The emergence of cryptocurrencies like Bitcoin and Ethereum has highlighted how traditional markets lack transparency and work against the „little guy“, according to Jesse Powell, CEO of crypto exchange Kraken.
„Ethereum gives you access to a whole world of decentralised smart contracts, decentralised exchanges, credit protocols. DeFi is really a Bitcoin System eating the world of finance, whether people know it or not yet. I think in 10 years we will all be doing 90% of our financial services on a blockchain,“ Powell said.
Lots of opportunities for bad things
He comments that cryptocurrencies are very different to traditional stock markets, for example, which require so many intermediaries and custodians. Because of this, traders have to rely on third parties to technically own and move their assets – and this system is quickly becoming obsolete with the advent of cryptocurrencies.
„It’s a very different system, and I think it’s a system that really isn’t necessary now that we have a crypto system. And I think we would be much better off with a pure instrument system where people can take their shares, move them wherever they want, trade them wherever they want, and trade directly on an exchange,“ Powell said.
Moreover, the traditional system disadvantages the „little guy“, lacks transparency and there are „so many opportunities for bad things to happen“, according to Powell.
Industry still in its infancy
At the same time, Powell acknowledged that applying the benefits of cryptocurrencies to other traditional markets, such as equities, will require some revamping of the regulatory framework.
„I think it will be up to the regulators and the legislators to allow this to happen. I mean, there is nothing technically preventing this today. […] So what we really need is some innovation in the regulatory and legislative space. The technology is there today,“ he said, adding, „I think all of that will eventually come for stocks on blockchain.“
Fortunately, there is still plenty of time for that to happen, as most people in the world don’t even own cryptocurrencies and are a ways away from buying bitcoin cheap, so „we’re still extremely early in this space,“ Powell explains.
„And I think the more money is printed, the less trust people have in governments, the less trust people have in the financial system, the stock market, the more they will look to the crypto markets where they have full transparency, full custody of their assets, and the ability to do what they want, when they want.“