Decentralised Finance is reshaping the way money flows—challenging long-standing barriers to access. With blockchain at its core, it holds revolutionary potential—but can it truly deliver on its promise?
Decentralised Finance (DeFi) is experiencing an explosive resurgence. After a significant crash in 2022, borrowing activity on major DeFi platforms surged nearly 10-fold, reaching $19 billion by the end of 2024. By April 2025, the total money locked in DeFi platforms skyrocketed to $113 billion, signalling how rapidly DeFi is disrupting the financial world.
While the rise in DeFi is evident, it’s not just about the growing popularity of digital money. It represents an entirely new way of saving, borrowing, and transacting in regions where traditional banking infrastructure has often failed.
DeFi operates on blockchain technology, utilizing smart contracts—self-executing computer programs that automate transactions once predefined conditions are met.
Unlike traditional banks, which act as intermediaries, DeFi allows anyone with a smartphone, an internet connection, and a crypto wallet to perform financial transactions, bypassing banks entirely.
The central advantage here is that DeFi doesn’t require a physical bank, making it accessible to populations who live in areas where financial institutions are either non-existent or difficult to access.
Several factors are driving DeFi’s growth. First, Ethereum—once the dominant blockchain in DeFi—still commands 66% of the total value locked, but its dominance has decreased as other blockchains gain traction. Platforms like Tron (with JustLend at $6.5 billion), Binance Smart Chain (Venus at $2.4 billion), and Solana (Jito at $1.9 billion) are emerging as serious contenders in the DeFi space.
This decentralised shift is a response to gaps in traditional finance. It opens up the possibility for financial inclusion by providing alternatives for people in underserved areas to manage their finances without the need for a physical bank.
DeFi’s real-world impact is already visible in regions with limited banking infrastructure. In Kenya and Nigeria, where mobile money services like M-Pesa are widely used, DeFi platforms such as Celo and Kotani Pay have taken financial inclusion a step further.
Users can now send and receive digital dollars using just their phone number. For instance, a worker in Nairobi can get paid in stablecoins through Celo and cash out using M-Pesa—no smartphone or traditional bank account required.
In Southeast Asia, where smartphone use is high but banking access remains limited, DeFi platforms like Xend Finance and Cake DeFi are bridging financial gaps. These platforms enable users to save, earn, and borrow using blockchain. Migrant workers benefit from cheaper and faster remittance services, while farmers gain access to microloans without the hassle of paperwork or intermediaries.
Meanwhile, in inflation-stricken countries like Argentina and Venezuela, DeFi provides a financial lifeline.
Freelancers and small businesses are increasingly turning to stablecoins to protect their income from currency devaluation, receiving payments in crypto and converting them to digital dollars to preserve value.
While DeFi offers significant advantages, it introduces new risks. In a 2025 report, the Bank for International Settlements labelled DeFi adoption as reaching a “critical mass” but flagged concerns over investor safety and systemic risks. In 2022 alone, DeFi platforms accounted for 82% of all crypto theft, totalling $3.1 billion, according to Chainalysis.
DeFi platforms also face vulnerabilities like code bugs, hacks, and volatile market movements, which can undermine user confidence and financial security.
Additionally, these platforms often operate 24/7 without the regulatory frameworks or protections offered by traditional banks, making them susceptible to manipulation and scams.
Despite the technology’s promise, its complexities are a major hurdle. While DeFi removes banking barriers, it introduces new ones related to technology.
Many platforms require users to manage wallets, gas fees, and private keys—concepts that are difficult to grasp for those without a background in tech or finance.
For people in rural areas or low-income regions, this steep learning curve can be a dealbreaker, as one mistake could result in the permanent loss of funds.
Moreover, many DeFi platforms still have clunky, unintuitive user interfaces, which only add to the complexity.
Terms like “liquidity mining” and “impermanent loss” are not easily understood, making the technology seem like an exclusive, niche sector compared to the simpler, more user-friendly interfaces of traditional banking apps.
In addition to technical challenges, DeFi’s global reach is constrained by issues related to access.
While anyone with an internet connection can theoretically use this technology, in practice, many people in rural or impoverished areas lack reliable internet access, the necessary hardware, or face government restrictions on using cryptocurrencies. Language barriers further prevent many from fully accessing or understanding DeFi platforms, limiting its reach and effectiveness in driving global financial inclusion.
As this fintech continues to evolve, developers are taking steps to address these challenges. Platforms like Valora are simplifying the experience, allowing users to send money using just phone numbers rather than complex wallets.
Cash-to-crypto agents, like mobile money shops, are helping users convert cash into digital currency, making it easier to adopt DeFi in underserved regions.
Regulatory frameworks are also beginning to take shape. In Europe, the MiCA framework is paving the way for clearer regulation, while countries like Japan, Singapore, and Australia are balancing innovation with safety.
DeFi’s integration with traditional finance is also underway, with real-world asset tokenization poised to be a major driver of growth. According to Boston Consulting Group, this market could be worth $16 trillion by 2028, or 10% of global GDP.
Deloitte predicts that by 2026, over 80% of global banks will offer DeFi-powered services, blending the transparency of blockchain with the trust of traditional finance.
While DeFi offers transformative possibilities for financial inclusion, its adoption is still hindered by challenges such as complexity, cybersecurity risks, and access issues.
As technology improves and regulatory frameworks solidify, the potential of decentralised finance to meaningfully unlock capital for the unbanked remains to be seen.
