The Limits of DeFi for Financial Inclusion
Lessons from ASEAN
Decentralised finance, including crypto-asset markets and DeFi protocol activity,
has been promoted as a tool to support the democratisation of finance. This report
presents quantitative evidence from ASEAN economies that participation in decentralised
finance markets has been largely driven by speculative forces and a fear of missing
out, rather than by practical use-cases that can promote financial inclusion. Since
decentralised finance today involves unregulated or uncompliant financial service
provision, the complexity and the non-custodial nature of such activity (particularly
DeFi protocol activity) make these practically difficult for retail participation.
The report provides policy considerations and discusses other digital finance tools
that could be considered as alternative catalysts for financial inclusion, particularly
when it comes to MSME financing.
Available from March 14, 2024