DeFi is complicated
One of our early observations is that decentralized finance protocols are complicated for regulated entities to implement, slowing the adoption of DeFi protocols in traditional finance.
For a bank in particular, jumping into DeFi doesn’t mean signing up for a service as a consumer would and jumping in without looking back. Unlike storing USD balances, traditional providers don’t have a solution for various challenges facing regulated entities to take advantage of decentralized protocols. Add to that key management and increasing regulatory changes, and financial institutions are burdened with a complex, high-stress, high-risk body of work to manage. Challenges only become more extraordinary in their complexity when one dives deeper down the new technology rabbit hole.
Complicated doesn't mean impossible
These challenges are high-risk and difficult to tackle in a multi-chain world, but they are not impossible to solve from a technical perspective. Removing these barriers allows regulated entities to participate. Not only will their business grow, but so will their usage of decentralized technologies — a combination beneficial to everyone. There is over $200T parked in traditional CeFi institutions. Brale can help put that capital to work.
Global bank deposits and securities
Global bank deposits and securities vs. stablecoins
Stablecoin usage alone has grown by 489% year over year since 2015, with $152B as of this writing. In context, more than $100T sits in bank liabilities (deposits) and another $100T+ in government securities (assets backing many stablecoins). It is unknown whether the future looks more like stablecoins, CBDCs, or digital dollars. However, the benefits of DeFi protocols, including 24/7 access and a global footprint, will undoubtedly entice more regulated entities to deploy assets on-chain.
Brale believes there is a tremendous opportunity to help. If less than 1% of capital is on-chain today based on these datasets, the opportunity to enable the other 99% is incredible.
Getting market participant assets on-chain runs into both technology and financial product challenges. We have kept that in mind to ensure entities can use only our technology to start and will eventually offer financial products when regulatory approvals are in place.
Where we’re spending time
Brale is spending a lot of time enabling financial institutions to take advantage of stablecoins and various DeFi ecosystems. We're focusing on Ethereum, Avalanche, Stellar, Polygon, Solana, and Ripple and are eager to engage wherever we can be helpful.
If you are interested in stablecoins or CBDC, we would be happy to show you a demo of our early technology products. They dramatically reduce the barrier of entry for ecosystem participants and make getting assets on-chain a fast and secure process without needing to learn the complexities of the web3 world.
Request a demo and see what we're building.