Decentralized Finance (DeFi) is an umbrella term for a variety of financial applications in cryptocurrency or blockchain geared toward disrupting financial intermediaries. It comes with its share of risks, but digital identities can help to get over those obstacles and realize its potential. Information Age brought this interesting topic to our attention in their article, “How digital identities will help realise the true potential of DeFi.”

Small businesses play an important role in the economy. Unfortunately, they are underserved and overcharged by banks due to their poor risk-return profiles.

A digital identity solution would help to bring about a future where individuals and small to medium enterprises can unlock the full economic potential of open finance. Decentralized, privacy-preserving digital identity solutions would give citizens control over their data and avoid the need for ancient, customer relationship processes that often go further than they need to in the pursuit of compliance.

This is where blockchain can be a valuable contribution. As a decentralized, distributed ledger, it records the provenance of a digital asset. This increases security and reduces risks.

Melody K. Smith

Sponsored by Access Innovations, the world leader in thesaurus, ontology, and taxonomy creation and metadata application.