Banks are not keen to wait for changing regulations before launching decentralized finance products to take advantage of cost savings. According to Sudhir Pai, Capgemini’s chief technology and innovation officer for financial services, the fast-paced developments in decentralized finance, or DeFi, is increasing pressure to establish official digital currencies.
JP Morgan’s plan to open a branch in the Metaverse, as well as the plan to organize the Australian Open tennis tournament in the Metaverse, are both indicators of interest in the next wave of decentralized banking, according to him. Regulation cannot ignore decentralized finance since the next-generation decentralized infrastructure is coming closer to existing payment rails in terms of transaction speed, security, and low prices, according to Pai. Major Banks globally are not holding back to wait for rules because they believe the new networks will save them money, added Pai, who is based in Melbourne.
Capgemini divides the latest banking developments into five categories for its clients: digitization of processes, open banking, rethinking the digital trip, marketplaces, and the shift beyond banking to super apps. Over the last year, there has been a significant push toward decentralized finance.”DeFi is the next big thing in finance,” Pai asserted.
Metaverse refers to a network of virtual worlds, whereas DeFi refers to digital finance transactions that are conducted without the use of a mediator or a central authority.
Pai said that the client journey for providers is divided into three levels. It begins with an exchange, then continues on to the tokenization of assets, and finally, the safekeeping of those assets. “Banks can utilize this virtual infrastructure to test product performance before they are introduced,” Pai explained.
While banks have the potential to save money by using decentralised infrastructure, central banks can benefit from the programmability of digital currency. There will be a strong use case for central banks to tax that in the near future. Perhaps a percentage of the money paid goes to the account holder in the central bank if used digital currency.
This news is republished from another source. You can check the original article here
Be the first to comment