Torsten Stuber, CTO of Pendulum, says that “the decentralized finance (defi) ecosystem, despite being touted as a game-changing innovation, is still not connected to the fiat rail due to regulatory and Stuber says that once the “substantial amount of liquidity needed to facilitate efficient transactions” is in place, the decentralized finance ecosystem will succeed in capturing more traditional financial institutions. Stuber said that the decentralized financial ecosystem will be successful in bringing in more traditional financial institutions.
Defi’s perceived lack of regulation is a barrier to adoption
In addition, Stuber, who is using the Polkadot blockchain to bring the Fiat network into the decentralized financial ecosystem, said other ways defi proponents can win over traditional financial institutions to their side suggested education and awareness as other ways for defi proponents to win over traditional financial institutions.
Pendulum’s CTO also shared his views on central bank digital currencies (CBDCs), and their benefits and possible risks to defi In a written response sent to Bitcoin.com News, Stuber said that integrating CBDCs into the defi system is contrary to the very nature of decentralization; the CTO also explained why having more collateral could be a solution to the problem of stablecoin depletion during extreme market events.
Below are Stuber’s responses to questions sent by Bitcoin. com News.
Bitcoin. com News (BCN): the foreign exchange market is considered a $6+ trillion market that runs on infrastructure built by traditional financial institutions. There are indications that foreign exchange trading based on decentralized finance (defi) could improve the efficiency of, or access to, this market. However, some argue that the defi space needs to be further developed in order to do so. To help our readers understand why defi could be a game changer, please briefly define decentralized FX trading and tell us how it could benefit traditional businesses, fintechs, or traders.
Torsten Stuber (TS):Decentralized FX trading refers to the process of trading foreign exchange on a decentralized platform, typically built on a blockchain network. By leveraging smart contracts and automated market makers (AMMs), decentralized forex trading aims to improve the efficiency, transparency, and accessibility of traditional forex markets.
Specifically, we would like to highlight the following advantages in particular. First, decentralized forex trading can lower transaction costs by eliminating intermediaries. Second, blockchain-based platforms minimize market manipulation and fraud because all transactions are recorded in a transparent distributed ledger. Third, while traditional forex markets operate within specific trading hours by region, decentralized forex trading platforms function around the clock, allowing firms and traders to trade anytime, anywhere, and bypassing geographical constraints to seamlessly transcend borders and facilitates seamless cross-border trading, bypassing geographical constraints. Finally, the cryptographic principles underlying blockchain technology provide a more secure infrastructure for conducting foreign exchange transactions.
Smart contract integration will enable the creation of customizable and automated financial services such as automated market makers (AMMs) specializing in FX, lending protocols, and yield farming opportunities. This will open up new revenue streams for fintechs and traditional firms.Pendulum aims to create a shared financial infrastructure that bridges the gap between centralized and decentralized finance by integrating DeFi applications with traditional FX markets.
(BCN): Despite its advantages over traditional finance, the DeFi ecosystem is not as connected to Fiat Rail as some would like. What do you think is the reason for this?
TS:There have been several challenges in connecting Fiat Rail to Defi that have limited the spread of decentralized FX. One of the most important challenges is regulatory and compliance issues: the Defi platform typically operates in a decentralized permissionless manner, which can create uncertainty in terms of regulatory compliance. Traditional financial institutions are subject to strict regulations, so bridging the gap between the Fiat and Defi ecosystems will require addressing these concerns and ensuring compliance with applicable laws and regulations, including AML/KYC requirements.
Additionally, there are liquidity concerns. On-chain FX requires a significant amount of liquidity to facilitate efficient trading and reduce price slippage.
Torsten Stuber, CTO of Pendulum, said, “Despite the decentralized financial (defi) ecosystem being touted as a game changing innovation According to Stuber, the decentralized financial ecosystem will succeed in bringing in more traditional financial institutions once there is “a significant amount of liquidity needed to facilitate efficient transactions. He said that it would.
Defi’s perceived lack of regulation is a barrier to adoption
In addition, Stuber, who is using the Polkadot blockchain to bring the Fiat network into the decentralized financial ecosystem, said other ways defi proponents can win traditional financial institutions over to their side suggested education and awareness as other ways for defi proponents to win over traditional financial institutions.
Pendulum’s CTO also shared his views on central bank digital currencies (CBDCs), and their benefits and possible risks to defi In a written response sent to Bitcoin.com News, Stuber said that integrating CBDCs into the defi system is contrary to the very nature of decentralization; the CTO also explained why having more collateral could be a solution to the problem of stablecoin depletion during extreme market events.
Below is Stuber’s response to a question sent by Bitcoin. com News.
Bitcoin. com News (BCN): the foreign exchange market is considered a $6+ trillion market that runs on infrastructure built by traditional financial institutions. There are indications that foreign exchange trading based on decentralized finance (defi) could improve the efficiency of, or access to, this market. However, some argue that the defi space needs to be further developed in order to do so. To help our readers understand why defi could be a game changer, please briefly define decentralized FX trading and tell us how it could benefit traditional businesses, fintechs, or traders.
Torsten Stuber (TS):Decentralized FX trading refers to the process of trading foreign exchange on a decentralized platform, typically built on a blockchain network. By leveraging smart contracts and automated market makers (AMMs), decentralized forex trading aims to improve the efficiency, transparency, and accessibility of traditional forex markets.
Specifically, we would like to highlight the following advantages in particular. First, decentralized forex trading can lower transaction costs by eliminating intermediaries. Second, blockchain-based platforms minimize market manipulation and fraud because all transactions are recorded in a transparent distributed ledger. Third, while traditional forex markets operate within specific trading hours by region, decentralized forex trading platforms function around the clock, allowing firms and traders to trade anytime, anywhere, and bypassing geographical constraints to seamlessly transcend borders and facilitates seamless cross-border transactions, bypassing geographical constraints. Finally, the cryptographic principles underlying blockchain technology provide a more secure infrastructure for conducting foreign exchange transactions.
Smart contract integration will enable the creation of customizable and automated financial services such as automated market makers (AMMs) specializing in FX, lending protocols, and yield farming opportunities. This will unlock new revenue streams for fintechs and traditional firms.Pendulum aims to create a shared financial infrastructure that bridges the gap between centralized and decentralized finance by integrating DeFi applications with traditional FX markets.
(BCN): Despite its advantages over traditional finance, the DeFi ecosystem is not as connected to Fiat Rail as some would like. What do you think is the reason for this?
TS:There have been several challenges in connecting Fiat Rail to Defi that have limited the spread of decentralized FX. One of the most important challenges is regulatory and compliance issues: the Defi platform typically operates in a decentralized permissionless manner, which can create uncertainty in terms of regulatory compliance. Traditional financial institutions are subject to strict regulations, so bridging the gap between the Fiat and Defi ecosystems will require addressing these concerns and ensuring compliance with applicable laws and regulations, including AML/KYC requirements.
Additionally, there are liquidity concerns. On-chain FX requires a substantial amount of liquidity to facilitate efficient trading and reduce price slippage.
Torsten Stuber, CTO of Pendulum, says, “The decentralized finance (defi) ecosystem is touted as a game-changing innovation According to Stuber, once the “substantial amount of liquidity needed to facilitate efficient transactions” is in place, the decentralized financial ecosystem will succeed in bringing in more traditional financial institutions. . will be successful in bringing in more traditional financial institutions,” he said.
Defi’s perceived lack of regulation is a barrier to adoption
In addition, Stuber, who is using the Polkadot blockchain to bring the Fiat network into the decentralized financial ecosystem, said that defi proponents can win traditional financial institutions to their side He suggested education and awareness as other ways to do so.
Pendulum’s CTO also shared his views on central bank digital currencies (CBDCs), and their benefits and possible risks to defi In a written response sent to Bitcoin.com News, Stuber said that integrating CBDCs into the defi system is contrary to the very nature of decentralization; the CTO also explained why having more collateral could be a solution to the problem of stablecoin depletion during extreme market events.
Below are Stuber’s responses to questions sent by Bitcoin. com News.
Bitcoin. com News (BCN): the foreign exchange market is considered a $6+ trillion market that runs on infrastructure built by traditional financial institutions. There are indications that foreign exchange trading based on decentralized finance (defi) could improve the efficiency of, or access to, this market. However, some argue that the defi space needs to be further developed in order to do so. To help our readers understand why defi could be a game changer, please briefly define decentralized FX trading and tell us how it could benefit traditional businesses, fintechs, or traders.
Torsten Stuber (TS):Decentralized FX trading refers to the process of trading foreign exchange on a decentralized platform, typically built on a blockchain network. By leveraging smart contracts and automated market makers (AMMs), decentralized forex trading aims to improve the efficiency, transparency, and accessibility of traditional forex markets.
Specifically, we would like to highlight the following advantages in particular. First, decentralized forex trading can lower transaction costs by eliminating intermediaries. Second, blockchain-based platforms minimize market manipulation and fraud because all transactions are recorded in a transparent distributed ledger. Third, while traditional forex markets operate within specific trading hours by region, decentralized forex trading platforms function around the clock, allowing firms and traders to trade anytime, anywhere, and also bypassing geographical constraints to seamlessly transcend borders and facilitates seamless cross-border trading, bypassing geographical constraints. Finally, the cryptographic principles underlying blockchain technology provide a more secure infrastructure for conducting foreign exchange transactions.
Smart contract integration will enable the creation of customizable and automated financial services such as automated market makers (AMMs) dedicated to FX, lending protocols, and yield farming opportunities. This will unlock new revenue streams for fintechs and traditional firms.Pendulum aims to create a shared financial infrastructure that bridges the gap between centralized and decentralized finance by integrating DeFi applications with traditional FX markets.
(BCN): Despite its advantages over traditional finance, the DeFi ecosystem is not as connected to Fiat Rail as some would like. What do you think is the reason for this?
TS:There have been several challenges in connecting Fiat Rail to Defi that have limited the spread of decentralized FX. One of the most important challenges is regulatory and compliance issues: the Defi platform typically operates in a decentralized permissionless manner, which can create uncertainty in terms of regulatory compliance. Traditional financial institutions are subject to strict regulations, so bridging the gap between the Fiat and Defi ecosystems will require addressing these concerns and ensuring compliance with applicable laws and regulations, including AML/KYC requirements.
Additionally, there are liquidity concerns. On-chain FX requires a substantial amount of liquidity to facilitate efficient trading and reduce price slippage.
