Nitin Gaur, director of IBM financial services and digital assets, explained how the tech firm is assisting financial institutions to leverage on DeFi popularity.
Gaur, who is the author of book titled ‘Blockchain for Business,’ states that it is necessary for banks to comprehend and adopt DeFi. If not, he states that it could ultimately shatter their conventional business model.
“I think that the financial institutions should understand it because it has the potential to eventually sort of take over and subside the business elements of existing business models. And that’s one reason why a bank should do it.”
The arrival of DeFi has given rise to a set of regulatory challenges to financial organizations and IBM trusts it can assist their clients to maneuver it.
Nevertheless, several financial institutions are going through initial exploratory phase in case of DeFi and are caught in critical point between digitizing conventional securities and decentralized finance.
Irrespective of that, Gaur predicts entry of “large banks, starting with investment banks.”
Concurrently, he accepts that banks can only turn victorious if they analyze their strategy again. Beyond the development of new DeFi products, the actual value can be realized only if they enfold the global characteristic of blockchain networks.
He stated that IBM is interested to assist in linking banks “into the dynamicity of the global marketplace that the DeFi space has to offer, not to mention the innovation into products, creating new competing products, and creating sort of add-on products.”
While there is no clarity as to when top banks will get into DeFi domain, Gaur pointed out that Goldman Sachs roping in a new chief of digital assets division is a positive development.
