On 12th July we came together at County Hall for the launch of FTT DeFi – the one-day show exploring the opportunities and challenges of decentralised finance, crypto and Web3 in financial services.
After wrapping up our launch event last week, we recapped some of the key takeaways as our community came together to connect, share and learn about the potential of DeFi, it’s infrastructure and how it will shape industries in the years to come.
Not just a passing trend – DeFi is having real, positive impact
Until very recently, and even still, some people believe DeFi to be a passing trend that will disappear and a risky investment for businesses. But at FTT DeFi we heard about the real-world impact DeFi is having, for example in emerging markets where it is enabling underbanked segments of society to access banking products for the first time.
There are many positive use cases for DeFi and its technology; from providing financial services to farmers in Haiti, to building decentralised justice platforms on the blockchain, we heard from inspirational leaders utilising DeFi for good.
Bridging the gap with CeFi
We heard from TradFi, CeFi and DeFi experts throughout the day and a key point was enforced in many of the sessions; DeFi is not necessarily the end goal, and the technologies could still benefit organisations who remain in the TradFi and CeFi space.
Elements of decentralisation can be utilised to improve processes, products and services. Some examples came in our ‘Decentralisation and the future of fair market structure’ panel where we had several centralised exchanges, such as clearpool.io, who had implemented smart contracts into specific pieces of their process. In Clearpool.io’s case, they used DeFi technologies to complement their existing process.
CeFi also provides a bridge over to DeFi offerings from traditional finance, which could offer an opportunity for traditional institutions to engage with the DeFi world. This is already shown with centralised platforms that interact with DeFi products, for example, liquidity, tokenisation, or staking.
Banking can be optimised through blockchain
Although many are unsure about the stability of crypto, there seems to be more certainty around the potential of blockchain technology to improve products and processes. Blockchain’s impact is clear and many panels throughout the day outlined its benefits which include transparency, immutability, trustworthiness, and it being cost-effective by removing intermediaries.
Examples of where blockchain has had an impact included international transfers, enhancing security and lowering fraud risk, and lending. As more use cases arise, it’s clear that the banking industry’s adoption is picking up after what might be considered a steadier start.
The potential of self-sovereign identity could have a huge impact on many industries and areas of life
Identity plays an essential role in everyday life but there are key issues around security and privacy which have led to criminal activity such as fraud and online hacking. With its foundations on blockchain technology, self-sovereign identity has the potential to offer greater trust, privacy, and control to users and only reveal information as is required. This is an exciting use case for blockchain which could have a huge impact across many industries and areas of life.
Regulation is taking shape and will help build trust
One of the key barriers to the wider adoption of both crypto and DeFi is the lack of regulation at this stage. However, on the Regulation and Risk stage we considered the challenges that regulators are facing and explored what an effective regulatory policy framework could look like.
The past couple of months have been exceptionally busy in the UK and EU in respect of regulatory developments. More work still needs to be done to build and refine a framework that encourages innovation but more importantly ensures customers are protected.
Perhaps we can learn from TradFi and CeFi and draw comparisons to see what potential regulation could look like in practice. A key takeaway was that crypto industries should be pre-regulation and organisations will play a key role in helping to build trust and help customers to feel safe.
A duty of care
Following from the above, banks and fintech have a huge opportunity to launch crypto products and be the trusted party that could catapult adoption in a safe manner. Customers may be more likely to adopt crypto if their trusted bank rolls out the capabilities, rather than moving over to a crypto platform.
Working in partnership with third parties will enable institutions to offer products that people want so customers do not turn to other platforms and risk losing money unnecessarily.
We heard from a fantastic panel which was joined by our headline sponsor, Zumo Enterprise. Zumo Enterprise works with banks and fintechs to ensure safe adoption of crypto products, which also align with net zero commitments.
Engage with digital communities
As reality and virtual worlds continue to merge, creators and small business owners can benefit hugely in building their own digital communities. NFTs, the metaverse and Web3 provide opportunity for them to engage with their target audiences. We heard from creators across fashion, football, storytelling, art and more, who are constantly adopting and adapting to changing customer behaviours through interactions in Web3.
Collaboration will be key
Throughout the day, we heard from institutions, fintechs and technology and infrastructure providers who each presented unique use cases and partnership models that have enabled them to build their DeFi propositions.
Whether its KYC, compliance, blockchain infrastructure or digital wallet integration, many institutions are now working with third parties, and it was great to see everyone interacting, educating and sharing with each other at FTT DeFi.
There’s still a lot to learn!
In addition to collaboration, further education will be needed as adoption increases. Institutions will need to gain a stronger understanding of DeFi and its infrastructure, as well as regulatory effects, but outside of the organisation, it will also be crucial to educate customers on both TradFi and DeFi and their choices to finance their lives.
And we learned so much more! These are just some of the highlights from FTT DeFi and we can’t wait to be back on the stage. If you want to learn more about the DeFi universe, join us on 14-15 November at The Brewery, London for the Fintech Talents Festival, where we will dedicate a whole stage to all things DeFi, crypto, Web3 and more.
In the meantime, you can watch the highlights from FTT DeFi below.