Decentralised finance (De-Fi), in its simplest form, is an umbrella term for financial services on the public blockchains Binance and Ethereum, among many others. De-Fi is a global service that is transacted on a peer-to-peer basis without dealing on a centralised system. With De-Fi, mainstream financial services that are provided by traditional banks, such as earning interest, borrowing, lending, purchasing insurance and derivatives, and trading assets, can be achieved a lot faster with much less paperwork, without the need for a third party.
There is a lot of confusion among the people on what De-Fi could and would do for them in this current market. De-Fi enables automated smart contracts that can be used in different sectors like insurance and real estate. Simply put, De-Fi has the potential to transform and transfer the traditional banking sector into a more decentralised model for serving clients.
Before the introduction of De-Fi, yield farming, which is the practice of staking and lending of cryptocurrency assets to generate high returns, was made available by traditional financial systems to institutions that wished to lend money to individuals and businesses. “Through decentralisation,”, Anndy clarifies, “making financial processes such as yield farming available to the world has the potential to deliver financial opportunities and joy experienced by the elite to the rest of the majority of people.”
JP Morgan, who was once very averse to cryptocurrency, is currently bullish on the staking business, which generates $9B in annual revenue and could be worth over $20B when Ethereum2.0 launches in 2022. According to analysts, $40B in 2025 is not as far-fetched as it seems.
There exists at least 1.7B unbanked people in the world; of which 290M people are in Southeast Asia. With blockchain technology, there is hope to create an alternative to the traditional financial system.
Despite the hype around De-Fi, it is most likely that the future financial system will work on a hybrid mode, connecting De-Fi with traditional banks. In this scenario, central banks, regulators, and overseers of the economy would have a vital role to play in the digitalised and decentralised finance system.
“It is also worth noting, in this context, the rise of Central Bank Digital Currencies (CBDC). While the Chinese CBDC, the digital Yuan, was born as China’s answer to Facebook Libra, the recent ban of Bitcoin and the advancements of digital Yuan by the People’s Bank of China shows that the rise of De-Fi is by no means guaranteed in its decentralised form.”, says Anndy.
In everything that exists in the traditional financial systems, there’s always a parallel version in De-Fi – ranging from credit lending, trading derivatives, and asset management, to insurance. There is a strong belief that De-Fi and centralised finance would a middle ground, or a way to integrate with each other.
Vietnam has a very strong user base for cryptocurrency – a lot of good games originated from there such as Axie Infinity. During this period of time where COVID-19 has stopped a majority of key activities, there was a time of desperation where people were unable to make a living. Looking at the cryptonomics behind this, users can play Axie and make money to survive in the real world.
Cryptocurrencies have gained a lot in the past 2 years due to COVID-19, and have helped numerous people in different ways. The journey of cryptocurrencies and De-Fi has just begun and only time will tell if they’re here to stay.
The Vietnam CFO 2021 was a discussion between the board panelists – Tim Evans, Chief Executive Officer of HSBC Vietnam; Sharath Martins, ACCA’s Senior Policy Consultant; Anndy Lian, Chairman of BigONE Exchange; and Hiroaki Endo, Señor Research Fellow of Japan Association for CFO. The purpose of this forum was to promote the sharing of local and international experiences, skills, knowledge, and information in the area of corporate finance governance.
Elements of transitory inflation have been noted, but there are also elements of more permanent inflation. In Vietnam this year, inflationary impact may have been muted but to a great extent the economy has been impacted by a lack of consumption. “Our house view for the Vietnamese economy is that inflation should be around 3.5% next year.”, says Tim.
It is important to return to the positive narrative after COVID-19, but it is imperative to start looking at plans where that narrative continues to be at risk. Recently, a more deadly, new variant of COVID-19, Omicron (B.1.1.529), has been discovered. The people have voiced their concerns on when the pandemic will stop evolving but there has been no answer. “If we keep thinking that way, we’re not going to prepare ourselves and the supply chain.”, says Sharath.
In this forum, important topics such as inflation, globalisation, new growth strategies, blockchains, macroeconomy, and supply chain distribution were brought up by the panelists. It is imperative to understand what is impacting not only Vietnam, but also the rest of the world. The world as we know it is changing and views of the people need to change as well.
Currently, he is appointed as the Chief Digital Advisor at Mongolia Productivity Organization, championing national digitization. Prior to his current appointments, he was the Chairman of BigONE Exchange, a global top 30 ranked crypto spot exchange and was also the Advisory Board Member for Hyundai DAC, the blockchain arm of South Korea’s largest car manufacturer Hyundai Motor Group. Lian played a pivotal role as the Blockchain Advisor for Asian Productivity Organisation (APO), an intergovernmental organization committed to improving productivity in the Asia-Pacific region.
An avid supporter of incubating start-ups, Anndy has also been a private investor for the past eight years. With a growth investment mindset, Anndy strategically demonstrates this in the companies he chooses to be involved with. He believes that what he is doing through blockchain technology currently will revolutionise and redefine traditional businesses. He also believes that the blockchain industry has to be “redecentralised”.