The Rise of DeFi: A Fintech-Driven Revolution
As the crypto industry embarks on another bullish phase in 2025, there is a palpable sense of optimism surrounding the potential for decentralized finance (DeFi) to achieve mainstream adoption. This optimism is fueled by the significant technological advantages DeFi offers, as highlighted by Robinhood CEO Vlad Tenev. He emphasized the cost-effectiveness of DeFi, stating, “The cost of running a crypto business is an order of magnitude lower, because you get to leverage so much of the public infrastructure, and these public blockchains do a lot of the heavy lifting when it comes to settlement and transactions.”
While Tenev’s assessment underscores the potential efficiencies of DeFi, a significant hurdle remains: the user experience. Even for seasoned crypto enthusiasts, DeFi platforms often lack the ease and convenience associated with traditional financial platforms. However, there is hope on the horizon, driven by the expertise of fintech companies known for their user-friendly designs.
How Fintechs Will Drive Onchain Finance
Fintech companies, with their tech-centric cultures, are well-positioned to adopt DeFi solutions that operate transparently on decentralized networks. The fusion of traditional fintech and crypto is already underway, as seen with centralized exchanges like Coinbase and Binance offering debit cards and fintech firms like Revolut and Robinhood expanding into crypto services.
This convergence is further evidenced by strategic moves such as Stripe’s $1.1 billion acquisition of Bridge and PayPal’s introduction of $PyUSD stablecoin, showcasing the growing importance of stablecoins in payment systems. By combining fintech’s consumer-focused expertise with DeFi’s transformative infrastructure, this synergy is set to propel crypto into a new era of growth.
What Fintechs Can Gain from DeFi
Traditionally, fintech companies have relied on proprietary infrastructures owned by traditional finance institutions. DeFi offers an open, transparent, and user-owned alternative, reducing costs and enhancing control for fintech firms. Most DeFi services operate on public blockchains with open-source code, allowing for seamless integration and collaboration within the development community.
By leveraging open financial infrastructure, fintechs can gain a competitive edge, reduce development costs, and potentially offer lower fees to customers. The ability to connect to larger networks through open infrastructure enables fintechs to deliver more efficient services, enhancing the accuracy and affordability of financial transactions.
Moreover, DeFi products now allow fintechs unprecedented control over how they build and interact with open financial systems. These flexible solutions enable firms to manage risks and comply with regulations without creating proprietary systems from scratch. DeFi’s shared infrastructure supports diverse use cases, including foreign exchange, yield-bearing accounts, and lending.
Despite the promising outlook, challenges remain in regulation and security, with traditional financial institutions likely to resist DeFi’s rise. Nevertheless, as fintechs increasingly leverage DeFi’s benefits, its advantages will become undeniable, paving the way for a more open, efficient financial system.
Paul Frambot is the CEO and co-founder of Morpho, a DeFi lending protocol with $6 billion in total value locked. The opinions expressed in this piece are solely those of the author and do not necessarily reflect the views of Fortune. For more insights, visit Fortune.
