The post DeFi’s promised to replace TradFi, not sit on top of them appeared on BitcoinEthereumNews.com.

Disclosure: The views and opinions expressed here belong solely to the author and do not represent the views and opinions of crypto.news’ editorial. Decentralized finance likes to tell a very simple story about itself. Billions of people are unbanked. Traditional finance is slow, exclusionary, expensive, and biased toward incumbents. Blockchains are open, permissionless, global, and neutral. Therefore, DeFi will bank the unbanked. Summary DeFi didn’t replace traditional finance — it wrapped it. Its money, identity, pricing, access, and liquidity all still come from banks, regulators, and centralized infrastructure, so it can’t reach the people that system excludes. The unbanked don’t lack products; they lack rails. DeFi assumes stable internet, identity, custody, legal recourse, and on-ramps — exactly what unbanked populations don’t have — making most “financial inclusion” narratives structurally false. Until crypto builds new infrastructure instead of prettier interfaces, it’s just optimizing for capital, not people. Faster finance ≠ fairer finance — and without new rails, everything else is theater. It is a compelling narrative. It is also increasingly disconnected from reality. After five years of explosive experimentation, DeFi has built an extraordinary parallel financial system — but almost all of it still depends on the very infrastructure it claims to be replacing. We did not build new rails. We built new products on top of old ones. And that distinction is not cosmetic. It is the core reason why DeFi has failed to change or revolutionize financial services meaningfully. Status quo? Look closely at today’s DeFi ecosystem. Stablecoins such as Tether (USDT) and USDC (USDC) — the lifeblood of onchain activity — are overwhelmingly backed by bank deposits, Treasury bills, or custodial cash equivalents held in the traditional system. Fiat on-ramps and off-ramps are controlled by regulated intermediaries who decide who gets access and who does not. Oracles pull…

---

Filed under: News - @ January 11, 2026 4:26 pm