Today Boston Consulting Group’s (BCG) digital division Platinion published a report on Decentralized Finance or DeFi in conjunction with Crypto.com, the cryptocurrency exchange.
DeFi applications include payments, trading exchanges and lending, which operate in a permissionless environment. That means that only some onramps to convert fiat to cryptocurrencies are governed by anti money laundering rules. Once the user holds the cryptocurrency, there are few restrictions.
BCG says with the centralized financial (CeFi) system, SMEs often present a poor risk-return profile to banks in part because they fail regulatory checks. As a result, SMEs have less access to finance and where they can get loans, it’s expensive.
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