When Satoshi Nakamoto proposed a“peer-to-peer electronic cash system” in 2008, few people could have predicted the effect it would have on the world of finance 15 years later. Today, Satoshi’s Bitcoin is just one of more than 10,000 cryptocurrencies tracked by platforms like CoinGecko. Unfortunately, just as crypto’s success has been met with resistance by regulators, crypto enthusiasts have also antagonized traditional centralized financial institutions.
The decentralized nature of crypto and services like DeFi has created an environment in which crypto and centralized finance are often portrayed as opposing forces. However, what most crypto and DeFi fans seem to ignore is the role that CeFi institutions have played in helping blockchain and crypto succeed. Companies like Binance, Coinbase, and Kraken are part of the complex CeFi ecosystem, and without them, crypto wouldn’t be what it is today.
While crypto may offer some advantages over CeFi, such as greater transparency, security, stability, and lower fees if implemented correctly, it also comes with its drawbacks. Some of these drawbacks, such as the potential for fraud, are inherent to crypto’s decentralized nature.
CeFi, on the other hand, has been around for centuries and has proven to be a reliable and stable system. While also with drawbacks, CeFi’s integrity has allowed individuals and institutions to adopt crypto without deviating too much from regulatory compliance. CiFi has so far operated as an on and off-ramp for crypto, allowing users to easily convert their fiat currencies to digital assets and vice versa.
Coinbase’s recent feud with the Securities and Exchange Commission is an example of how CeFi organizations can help shape the future of crypto. Despite having been highly criticized by part of the crypto community, the exchange is now involved in what could be the biggest clash over crypto regulation. In the past, Coinbase’s CEO has also pushed for DeFi to remain unregulated, proposing a system that many believe could very well be the future of crypto.
Fortunately, the competitiveness between CeFi and DeFi seems to have decreased somewhat over the past couple of years. Today, many entrepreneurs, developers, and financial experts recognize the potential that both systems have to complement each other. Of these, many have chosen to collaborate to develop a more inclusive, innovative, and financial system.
As part of this year’s edition of Grit Daily House at Consensus, the “Rebuilding Trust in CeFi” panel saw four such experts sit down to share their insights on the role CeFi can play in boosting crypto adoption. These experts were Souq’s Co-Founder & Head of Product Ken Berkowitz, Arch’s Co-Founder & CTO Himanshu Sahay, Proven’s Founder Agustin Lebron, and Castle Island Ventures’s General Partner Sean Judge.
The panel was moderated by award-winning finance, economics, and business journalist Brad Keoun, who now serves as CoinDesk’s Managing Editor. With more than two decades of experience, he has both reported and edited for outlets like CoinDesk, TheStreet, Bloomberg, and the Chicago Tribune, making him the ideal moderator for such a panel.
To learn more about what these four powerhouses had to say about how CeFi and DeFi have cooperated and built trust, as well as what the future might look like for both, make sure to watch the panel on Grit Daily’s official YouTube channel or the video below!
