The sudden spark in interest in cryptocurrency has triggered many governments to take drastic steps. While some like El Salvador adopted it, others like China put a complete ban on it. In a particularly stringent operation, China has decided to stop all crypto-related activities in the country. From crypto miners to traders, all had to either abandon their business or flee to some other place. All this chaos had a negative impact on global cryptocurrency rates. Presently, we are seeing and more cryptocurrencies gaming back momentum.
What is interesting is that some experts are of the opinion that China’s crackdown might eventually help crypto. Since the ban, centralized crypto exchanges are the first target of the authorities. In countries where crypto is not banned, we still see authorities getting behind cryptocurrency exchanges. However, experts are arguing that while authorities and legislators target centralized crypto exchanges, decentralized exchanges will be on the rise. Decentralized Finance, or Defi, will eventually benefit from China’s decision to ban crypto. DeFi projects are gaining momentum worldwide. With companies like Ethereum and Solana investing in Defi projects, we might be on the verge of a DeFi golden period. However, one must bear in mind that Defi is not without its own problems.
In the context of regulations, DeFi is constantly coming under scrutiny by the United States Securities and Exchanges Commission. In the future, we may see regulations imposed on Defi as well. In spite of that possibility, DeFi has huge potential to replace traditional finance from its very core.