DeFi on the Brink: Replacing Banks or Merging with Them

The future of decentralized finance (DeFi) is uncertain, and its relationship with traditional financial systems (TradFi) is evolving. According to figures from leading companies such as 1inch, Axelar, Dune, SushiSwap, and others, DeFi may replace banks, merge with them, or operate quietly underneath them.

A new book titled 'ReDeFine Money' examines the history of DeFi and its potential future. The authors suggest that tokenized TradFi assets will play a significant role in this evolution, as well as the proliferation of appchains and Layer 3s.

Regulatory clarity is also crucial for the growth of DeFi. In 2025, a wave of legislative reforms in the United States enabled stablecoins to be used more widely. Major traditional financial institutions began exploring DeFi products and infrastructure, leading to a convergence of regulatory openness and institutional engagement.