Crypto, blockchain, DLT – we’ve all heard the buzz about Decentralized Finance – Defi – and that it is “the future” for Fintech, but what are we dealing with, and is that really the case?
To get the first insight into the topic, meet Ryan King – Head of Business Development at Dusk Network. With large expertise in European, the U.S., and East Asian regions Ryan has been a corporate training entrepreneur, blockchain and AI acceleration program developer, and today – ‘quite a big advocate of privacy, online privacy’ and regulation in the blockchain industry.
In preparation for the XFW Summit panel discussion on DeFi Holland Fintech interviewed Ryan King, who shared his thoughts and ideas about how society accepts DeFi, different global approaches, and DeFi regulations which can be the solutions for these issues. Have a read!
To put it into general public terms ‘DeFi is all the things that you would expect from finance, but without the middle parties involved, with significantly lower fees and much faster speed‘, and while it is taking a more and more important role in finance, for the biggest part of the society, even the name – decentralized finance – rises more uncertainties than provides assurance.
‘Some people want to go to a bank and get a card with a new pin code. Let’s be honest, it’s probably the older generation. No disrespect! They’re just not used to it, which is why, I think, they would be terrified by decentralized finance. On the other hand, younger generations are looking for something that’s easier. We value speed. We value efficiency. And starting from millennials and down to Gen Z, we’re very, very cost conscious. And DeFi has the ability to reduce costs and increase speed and make things more efficient and to have all your finances run off of your phone effectively. Maybe not everybody is ready, but I don’t think that’ll stop it from happening.’ says Ryan.
However, the global aspect also plays a different, and perhaps more important role: ‘the economy is a massive global competition. And comfortable or not, there’s a very real possibility that you lose talent, you lose ideas, and you lose innovation if you don’t move.’ For example, ‘Hong Kong is not a great place to start a start up. It’s a very expensive place. Office is expensive, labor is expensive. And so if you’re a VC funded startup, Hong Kong is not a great place. And as you know, a lot of these people building apps, building DeFi products are startups. By contrast, Europe and the UK are in a very different situation. So Europe is a very wealthy economy. But somehow when we talk about the future of world order, whether it’s finance or politics, we talk about it as a bipolar order of America and China. Europe doesn’t really get a look in and they’ve got this brain drain of talent. If you’re a European startup entrepreneur, you go to Silicon Valley, you don’t stay in Europe.’
And this is where the regulations step in and allow countries to compete and incentivize further innovation and collaboration. According to Ryan, the EU perhaps can’t offer such high funding opportunities as the U.S., but clearer regulations and guidelines in digital finance to some extent provide security and allow people to build experimental products. Similarly, Britain can look after EU regulations and adapt them to take advantage of some projects which may fall out of EU regulations.
‘Both the EU and the UK are looking at building regulations to effectively bring DeFi into the mainstream. What’s interesting to me is the fact that they’re building slightly different regimes from each other, which allows potentially some arbitrage between the two, or certainly for companies to pick the most comfortable jurisdiction for them. I’m a big fan of jurisdiction shopping in general, for everything from business registration to banking. It’s great when countries are competing against each other to provide the most business-friendly place for you to do business. Sort of almost free market competition by state governments.’
Similarly, from the consumers’ point of view – the EU’s MiCA regulations provide them with certain answers and security, even though a very small percentage of consumers take advantage of these insurance policies. ‘Anything that lowers risk is going to improve innovation and new ideas.’
So how is it important for collaboration? ‘Well, we can see the reason for them building these regulations is because they are concerned, particularly about stablecoins, about their impact on the traditional economy and the traditional finance sector. But the traditional finance sector is going to have to embrace DLT and DeFi in order to move forward. Meanwhile, DeFi is going to run up very quickly against limits to what you can do if it can’t interact with the traffic sector. So yeah, they have to be able to work together. It’s as simple as that. It’s two different pools of money, but money is one big pool, so there can’t be barriers between the two.’
On 16 September 2022 at XFW Summit, Ryan King will be speaking about ‘Does Brexit MEAN Brexit? Differences and Opportunities in UK and EU Crypto Legislation’ and discussing on the panel ‘Collaboration in fintech: is DeFi the answer?’. If you want to hear Ryan and many other great speakers, make sure to secure your ticket!
About Dusk Network
Dusk Network is the privacy blockchain for financial applications. A new standard for compliance, control, and collaboration. Our mission is to enable any size enterprise to collaborate at scale, meet compliance requirements and ensure that personal and transaction data remains confidential.
An event with all relevant players, stakeholders, and companies active in the FinTech scene to bring you the latest knowledge, developments, and insights through a variety of events and opportunities.