23 April 2025
By Gabriel Lee
As the global financial ecosystem rapidly evolves, digital assets, and increasingly decentralized finance (DeFi) have emerged as both a catalyst for innovation and a challenge for traditional systems. Disruptive, fast-moving, and full of promise, DeFi challenges long-held assumptions about how money flows, markets function, and institutions adapt. However, alongside these promises come drawbacks that may have long-term implications. This article will explore the role of DeFi in the current financial landscape, and how policymakers, regulators, and innovators can work together to create a sustainable ecosystem.
DeFi: From fringe to foundation
Initially viewed as a niche experiment on the periphery of finance, DeFi has gained significant traction. It now facilitates billions of dollars in transactions, offering programmable, transparent, and accessible financial services without traditional intermediaries. From decentralised exchanges to yield farming, DeFi is demonstrating that financial infrastructure can be reimagined as code—open-source, permissionless, and borderless.
This transformation is not hypothetical. At the Point Zero Forum, we will hear from industry leaders such as Anton Bukov, Co-founder, 1inch and Stani Kulechov, Founder and CEO, Aave on how DeFi protocols today are providing real alternatives to lending, trading, and asset management. While the infrastructure still has some way to go, the trajectory is unmistakable: DeFi is certainly pushing the boundaries of what is possible in financial services.
Implications for traditional finance
The rise of DeFi presents both a challenge and an opportunity for mainstream finance. It threatens established intermediaries by removing the middlemen from core services, while simultaneously enabling more innovative business models, entry to new markets, and delivers efficiencies that transform how traditional finance (TradFi) compete and evolve.
Banks, asset managers, and financial service providers are beginning to experiment with tokenized assets, on-chain settlement, and hybrid models that blend centralised oversight with decentralised infrastructure. This convergence of TradFi and DeFi could result in a more resilient, inclusive, and efficient financial system, but only if properly managed.
A regulatory crossroad
The real test lies in regulation. DeFi’s decentralised nature poses profound questions for regulatory frameworks built around centralised entities and jurisdictions. How do we ensure consumer protection in a protocol-based ecosystem? Who is the “responsible person” when things go wrong? And how can regulators remain agile in the face of rapid, code-driven innovation?
The answers lie in collaboration and open dialogue— which the Point Zero Forum is designed to foster. At the upcoming forum, we will hear from senior policymakers and industry leaders such as Katherine Minarik, Chief Legal Officer, Uniswap Labs as we look to preserve the core tenets of financial regulation—transparency, fairness, stability—while embracing the decentralised ethos that DeFi champions.
The Road Ahead: Trust and transparency
The road ahead requires building trust across the ecosystem. This means trust between code and users, regulators and innovators, bridging the old and the new. DeFi is not simply a technological phenomenon nor a political issue; It’s a philosophical shift. It challenges us to rethink the very foundations of finance, governance, and value exchange.
The opportunity is immense. But seizing it responsibly demands that we come together to chart a shared vision for a digitally native financial future.
*Gabriel Lee is the Head of Customer Success and a founding team member at GFTN, where he focused on fostering public-private sector collaboration to drive growth in the digital economy. His career spans key roles at the Monetary Authority of Singapore, InfoComm Asia, and Business China. Views expressed are his own.