DeFi near-zero onboarding costs can help 1.4B unbanked: 1inch co-founder

Decentralized finance (DeFi) platforms offer a significant cost advantage over traditional banks in user onboarding, according to Anton Bukov, co-founder of 1inch. Traditional banks spend $100-$300 per user for verification and account setup, while online banks spend $20-$30. In stark contrast, DeFi onboarding costs virtually nothing, requiring only a smartphone and internet access. This near-zero cost provides a powerful advantage in reaching the 1.4 billion unbanked individuals globally excluded from traditional finance due to high onboarding expenses.

Bukov emphasizes that the substantial costs associated with traditional onboarding prevent investment in the unbanked population, as the return on investment is unlikely. DeFi, however, eliminates these barriers. It enables the unbanked to participate in the global economy and conduct transactions using stablecoins like USDT, fostering financial inclusion. As internet access expands globally, DeFi’s potential to reach previously underserved populations increases significantly. The ease of participation is highlighted by Bukov’s example of exchanging goods, such as chickens, for USDT.

Beyond financial inclusion, Bukov highlights the value of DeFi’s access to global liquidity. He positions crypto as a developing independent economic zone, processing hundreds of billions through decentralized protocols. This transcends mere stablecoin adoption or national digital currency initiatives; it signifies a growing global liquidity hub. This dynamic liquidity facilitates financial experimentation, diverse yield strategies, and seamless cross-border capital movement.

Bukov suggests that nations aligning their regulations to facilitate access to this global liquidity can unlock substantial economic opportunities and foster international cooperation. He draws a parallel between increased trade between countries leading to greater success and the similar potential of crypto to drive economic growth. The low barrier to entry and global liquidity offered by DeFi present a compelling alternative to traditional financial systems, particularly for the unbanked and underbanked populations worldwide.