IBM plans to help banks get into DEFI
IBM will help banks move to DeFi format
The company plans to provide banks with the information they need to move to a decentralized work format
Banks’ independent attempts to enter the DeFi market are ineffective
The current operating model of financial institutions does not meet the requirements of the modern market
American technology company IBM will help banks capitalize on the development of the decentralized finance market (DeFi) Decentralized finance (DeFi) – this is financial services, built on blockchain technology, which offer users access to open, effective and … More).
The head of the financial services and digital assets of the organization, Nitin Gaur, spoke about this in an interview for Cointelegraph..
Why banks need DeFi?
The specialist believes that it is important for modern financial institutions to understand the principles of DeFi in order to use the advantages of the decentralized finance market to their advantage. Lack of interest on the part of banks, in his opinion, can destroy their built model of business development.
“I believe that financial institutions need to understand the principles of the decentralized finance market because the latter can capture and weaken some elements of the current business model of banks. This is one of the reasons indicating the need to study DeFi from traditional financial institutions, ”said Nitin Gaur.
The amount of funds blocked at the time of writing, for the needs of DeFi projects. Data: defipulse.com
The DeFi market, according to the expert, opens up access for financial organizations to innovative products and the creation of new ones that meet the needs of modern users of financial solutions.
How IBM will help banks?
To operate according to the rules of the decentralized finance market, classical banks will need to solve a number of regulatory problems. In this, according to Nitin Gaura, IBM can help them.
The tech company will help traditional banks move to DeFi by teaching the latest how the new business model works. At the same time, Nitin Gaur noted that DeFi products alone will not be enough for financial institutions to completely abandon the current system. The specialist believes that changes will require a global approach that includes the full use of the capabilities of blockchain technologies. Only in this case, in his opinion, the changes will become tangible..
Market capitalization of decentralized finance. Data: defimarketcap.io
Most financial institutions, according to the specialist, are in the early stages of exploring the possibilities of DeFi. Such banks, according to Nitin Gaur, are stuck between the transition to a decentralized format for working with assets and the simple process of digitizing securities. Despite this, in his opinion, in the near future, traditional financial institutions will begin to join DeFi. Investment banks, he believes, will be among the first to switch to decentralized principles of working with assets..
Read also: Someone Earned $ 16,000 Through a DeFi Protocol Loophole
We will remind, earlier analysts of the DappRadar company came to the conclusion that the threat of the domino effect is brewing in the DeFi market.
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