by Veronica Davis Thursday 2021-11-12 Updated 2021-11-18
When does Open Finance meet DeFi ? Well if you do not what the word DeFi means than it is important to know that first. This October I attended the World Blockchain Summit 2021 in Dubai and there were many strange words used on stage almost sounding like acronyms. The fact is that many of the words used were mostly invented by the techno people. So not really that much of a foreign language.
You may have already come across that word reading online and perhaps paid little or no attention to it such as DeFi. So if you do do not know what 'De', stand for than 'DeFi' will make no sense. The word DeFi is mostly used by the originators of technology. Because we are living in the Crypto world than words like Defi will be among many other crypto words used today.
World Blockchain Summit Dubai Panel Discussion October 12,2021
'De' means decentralized. It is the opposite of being centralized. Where there is a central authority as it controls the flow of money. In other words the Governments and the Central Banks around the World create regulations.
Therefore, the 'De' also stands for deregulation. Now what does Deregulation have to do with Blockchain technology. Why all the talk?
Today we know money as a value system in a currency. When we think of currency we think of coin. We think of a physical coin. They physical coin means nothing if it does not have an exchange system. The exchange system gives it the value. In the past, Since 600 BC (before Christ) Physical coins existed in the Lydian Kingdom. Around the World there has always been a value exchange system such as Bartering, gift giving or exchanging goods. Five thousand years ago, the Chinese used not coins but seashells as a form of currency.
What does Deregulation mean?
In the most simplest way deregulation means without regulation. It is hard to imagine what it means to live in a deregulated World because everything is regulated in one way or another.
What we know?
What we know today is that Countries are regulated by Sovereign Power and or Governments. All Industries are regulated through the Government in power. But this has only existed when deficiencies, error, disputes arise. Where there is Kingdoms like in Dubai, or Saudi Arabia Kings or Queens regulate their Kingdoms. Where there are Prime Ministers and Kingdoms such as Canada, England and Australia the Government is created and controlled by the Sovereignty King or Queen. Queen Elizabeth II owns Commonwealth countries forming a realm. Each of the mentioned countries is a sovereign state in which Queen Elizabeth II is the reigning constitutional monarch and head of state; however ; each realm functions independent and co -equal. A country will have a President where there is a Constitution such as the United States. A country such as El Salvador has a Presidential democracy where the president is both the head of state as well as head of government. In September of 2021, El Salvador became the first country to accept Bitcoin as their legal tender.
In 2009 Cryptocurrency started as a deregulated industry. But because the term industry is created where there are rules and regulation it has been referred to as an ecosystem. However, Blockchain technology is an industry. Today Cryptocurrencies is the new financial sector that is being regulated or deregulated. Countries not having the blueprint to control or regulate the ecosystem are beginning to change the outcome of cryptocurrencies. This year each country is beginning to quietly keep track of the ecosystem. Which in turn it will lead to manipulating and regulating the ecosystem. It is estimated that the blockchain technology industry increased to a billion-dollar industry, while cryptocurrencies have a total market cap over $1 trillion.
What is DeFi?
DeFi means DeCentralized Finance.
Fiat Currency vs Cryptocurrency
Today each Country has its traditional fiat currency. The fiat currency is regulated by their own country of origin. For example, in the United States the fiat currency is the US dollar and in Europe the euro. Cryptocurrencies is not a fiat currency because it us privately operated apart from any country or governments. Therefore cryptocurrency is deregulated. The first ever crypto currency had origins in the United States known as Bitcoin followed by other altcoins. The second most popular cryptocurrency is Ethereum an altcoin with Canadian origins. Today, there are thousand of crypto currencies today created from all around the World. Not all crypto currencies create a return on investment or survive.
What are the challenges surrounding DeFi regulations? In terms of Stablecoins; risk potential and regulation.. watch video below and find out from experts at the World Blockchain Summit in Dubai 2021, October 11-13
What is a stablecoin? Stablecoins are cryptocurrencies where the price is designed to be pegged to a cryptocurrency, fiat money, or to exchange-traded commodities. It is also class type where the stablecoin is a class of cryptocurrencies that tries to offer price stability and are backed by a reserve asset. Below are a list of stablecoins in cryptocurrencies
