Business

Decentralized Finance as a New Globalization Accelerator

Good history learners may remember medieval European cities. In those days, caravans of merchants traveled from city to state, carrying luxury goods and news from faraway places. It was this lifestyle that gave these merchants freedom of movement and choice. It is a concept very similar to the one described by Michael Ondaatje in his book British patient. The author envisions complete freedom, with no borders or nationalities restricting people in their efforts to develop and progress.

Today, broader access to financial markets through decentralized finance marks the beginning of the open world. DeFi has been very active from the point of view of wealth accumulation and cheaper finance, giving new meaning to the concept of “finance for all”. By eliminating middlemen through the use of blockchain technology, DeFi expands the scope of financial transactions while significantly reducing their costs. It is clear that DeFi is the future of finance and other industries. The only question left is: How quickly will we get there?

DeFi is bundled for a year

It is interesting that in just ten years we have departed with the concept of Bitcoin (BTC) as a digital currency (and personal bank in the traditional sense) and comes to BTC, farming, and all other crypto-alchemy.

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Basically, there are several types of applications for DeFi, reflecting its level of integration and scope of use. Decentralized exchanges (DEXs) represent a large portfolio of DeFi operations, providing authoritative cryptocurrency trading. Stablecoins are pegged to external assets, such as fiat currencies and precious metals. Lending platforms and prediction markets are also very popular in this area.

Related: What is shaping the future of the institutional crypto market?

Famously, DeFi enables profitable farming and liquidity mining, providing a niche way to leverage crypto assets that have now become mainstream.

Blockchain City

Entire cities are now adopting the new model and preparing to welcome crypto-savvy citizens. For example, Seoul developed a strategy to become a global leader in blockchain technology in 2019. Its then-Mayor, Park Won-soon, Introducing the Seoul Blockchain City Promotion Plan, which would become the basis for the Fourth Industrial Revolution. Even before the presentation, some administrative services already use blockchain technology in 2018. However, the new plan will expand the scope of the technology by including direct democracy, online verification, mileage management through S-Coin issuance, Seoul Citizen card, and many others.

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Offer crypto city in Nevada represents a different case. It was an experiment conducted by Jeffrey Berns, a crypto millionaire who bought land in the state of Nevada and decided to lay the groundwork to build a city entirely based on blockchain. This initiative met with opposition from local authorities, becoming one of the main obstacles on the way to establishing the new city. The element of decentralization is scaring politicians because of the possibility that they will lose control. However, the recent parliament hearing on Web3 offers hope of reaching common ground on the subject.

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Notably, Dubai launched the Dubai Blockchain Strategy initiative, becoming a key part of the United Arab Emirates’ Blockchain Strategy 2021, which seeks to move at least 50% of government transactions onto the blockchain. The government saw an economic opportunity for a positive transformation in its innovative approaches. Currently, Dubai attracts blockchain technology evangelists and digital nomads from around the world.

Related: Crypto Oasis: How the UAE Became the Digital Asset Champion of the Middle East

Smart government

It is clear that governments that fail to realize the potential of DeFi and blockchain could risk causing economic lag in their respective countries. The launch of a central bank digital currency (CBDC) has become a key sign of the movement of governments towards the implementation of blockchain-based technology.

The Atlantic Council has developed a tool monitor all countries about the different phases of their CBDC projects. Note that Ukraine, China, Sweden, South Africa, Malaysia, Singapore, Thailand, South Korea, Saudi Arabia, the United Arab Emirates and several other countries have launched a test version of the app. their CBDCs. At the same time, Nigeria, the Bahamas and the Eastern Caribbean countries have launched their CBDCs as active projects.

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Some see governments not only as governing institutions but as service providers of action. Global economic freedom, driven by DeFi, will allow governments to choose the best service providers in terms of their quality, speed and efficiency. This is particularly relevant for the taxation of crypto assets.

Responsibility is freedom

In crypto, your key means you own your money. You are your own bank. So being responsible with your money really gives the freedom to spend it as you want, use it however you choose, and interact on any platform or blockchain you want. To quote Michael Ondaatje:

“We are real nations, not boundaries drawn on a map with the names of powerful men.”

Nationality does not mean a position, but belonging to a certain group. One day, an entire group might move into its own metaverse. As competition for qualified professionals can become fiercer in the visa-free regime, entire cities and countries may devise special strategies to attract foreign visitors. digital item. But will they ever settle down, have this freedom?

This article does not contain investment advice or recommendations. Every investment and trading move involves risks and readers should do their own research when making decisions.

The views, thoughts and opinions expressed herein are the author’s own and do not necessarily reflect or represent the views and opinions of Cointelegraph.

Katia Shabanova is the founder of Forward PR Studio, with over 20 years of experience implementing programs for IT companies ranging from Fortune 1000 corporations and venture capital funds to pre-IPO startups . She holds a bachelor’s degree in English philology and German studies from Santa Clara University in California and a Master’s degree in philology from the University of Göttingen in Germany. She has been published in Benzinga, Investment, iTWire, Hackernoon, Macwelt, Embedded Computing Design, CRN, CIO, Security Magazine and others.