So what does the future hold for this engine of innovation? In terms of inbound institutional interest for this, we’re seeing for the first time people who are CFOs or treasurers of regular corporations coming and saying ‘I’m interested in looking at these stablecoin denominated yields.’” What Does DeFi Have To Offer?ĭeFi is one of the world’s youngest industries, already offering increased financial access to underbanked people and innovative financial instruments to advanced traders. “That actually feels more comfortable to an institution in many ways than taking principal risk directly in a cryptocurrency. However, one of the things that we’ve been seeing is that from many corporate treasurers, they’re having a hard time wrapping their head around allocating into something like Bitcoin, but they’re seeing yield markets that have emerged with dollar-denominated and dollar-delivered stablecoin yield that is very attractive,” Allaire said. “Certainly on the corporate side of things, I think if I’m a corporate treasurer and I’m looking at this today, I’m curious about DeFi, I’m hearing a lot about it, but I’m extremely intimidated - it feels dangerous and risky, and kind of nuts. However, yields generated through dollar digital currency capital markets offer a more palatable alternative. And when we talk about DeFi specifically, institutional involvement is extremely limited right now actively allocating into ‘yield farming’ or long-tail crypto tokens, there aren’t a lot of institutions doing that.”ĭespite recent headlines over businesses like Tesla or MassMutual buying native crypto tokens as a part of their treasury strategy, such aggressive moves are a bridge too far for most corporations today. “There are more and more asset management firms that have some kind of strategy around this, but it’s just getting started. There have been some high-profile companies that have put Bitcoin on their balance sheets, but it’s pretty limited,” Allaire said.

“Right now, the interest from businesses and institutions is fairly broad and fairly nascent. DeFi is one place they’re looking, but active engagement with decentralized finance protocols has so far been timid. With an economic backdrop of near-zero interest rates and high inflation, businesses the world over are searching for ways to put capital to work.

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