Thinley Namgay
Paro—The global banking system is on the cusp of transformation, with decentralised finance (DeFi) poised to play a pivotal role. DeFi offers entrepreneurs the ability to access capital, manage assets, and conduct transactions without relying on traditional financial intermediaries.
By leveraging blockchain technology, DeFi enables businesses to bypass banks and financial institutions, facilitating secure, transparent, and cost-effective peer-to-peer financial services. This innovation is particularly promising for small businesses and startups that often face barriers in traditional banking systems.
Experts suggest that as DeFi continues to evolve, it opens doors to economic inclusion, allowing businesses in emerging economies like Bhutan to engage more robustly in the global economy.
By adopting DeFi technologies, Bhutanese entrepreneurs could tap into global markets, raise capital more efficiently, and develop ventures that are less reliant on local financial institutions, thereby fostering innovation and entrepreneurship.
However, questions remain regarding the regulatory frameworks necessary to ensure the secure implementation of DeFi technologies, particularly in a small economy like Bhutan.
During a discussion on the future of banking and credit at the Bhutan Innovation Forum yesterday, panelists examined how DeFi could create opportunities for Bhutanese entrepreneurs while addressing the inherent risks and challenges of this new financial model.
Aung Kyaw Moe, founder and CEO of 2C2P, a financial services company headquartered in Singapore, said that the traditional financial system is still more robust and secure globally, but it is crucial for everyone to learn about DeFi, including digital coins and cryptocurrency.
Aung Kyaw Moe said that although banking sectors worldwide have implemented digital currency components at a minimal level with the help of blockchain, it is still a good investment opportunity.
Jeff Gallas, founder of Fulmo, said that DeFi would make business opportunities more convenient, as it allows people to sell products online without relying on intermediaries. “People without bank accounts cannot possess credit cards in the traditional financial system. DeFi could address this issue,” he said.
He also said that El Salvador adopted digital currencies as its national currency, recognising the benefits for its citizens in terms of job opportunities and increased social engagement.
Yves Bennaïm, founder and chair of 2B4CH, said that while traditional financial systems will be definitely disrupted by the emergence of blockchain and AI, DeFi provides opportunities for people to capitalise on these changes and reshape their business goals.
The experts underscored the importance of aligning financial regulations with emerging global financial innovations while also recognising associated risks and opportunities. They stressed that laws and regulations should be straightforward enough for the general public to understand.
Despite the potential of DeFi, risks remain, including a lack of legal protection, the irreversible nature of payments, and market volatility.