Those who have studied history well may remember the city-states of medieval Europe. Back then, merchant caravans traveled from one city-state to another, carrying luxury goods and news from faraway places. It was this lifestyle that allowed these traders to move and choose freely. It is a very similar concept to that described by Michael Ondaatje in his book The English Patient. The author envisioned complete freedom, with no borders or nationalities limiting people in their pursuit of development and progress.
Today, wider access to financial markets through decentralized finance marks the beginning of the open world. DeFi has been very positive from a wealth-building and cheaper financing perspective, giving a new meaning to the concept of ‘finance for all’. By removing middlemen through the use of blockchain technology, DeFi broadens the scope of financial transactions while significantly reducing their costs. It is clear that DeFi is the future of the financial and other sectors. The only question left is: how soon will we get there?
DeFi packed in a year
It’s quite fascinating how in just ten years we started off with the concept of Bitcoin (BTC) as a digital currency (and personal bank in the traditional sense) and arrived at Wrapped BTC, agriculture and all other crypto alchemy.
Essentially, there are several types of uses for DeFi, which reflect the depth of integration and range of use. Decentralized exchanges (DEXs) represent a large category of DeFi business and provide an authority-free trading of cryptocurrencies. Stablecoins are linked to external assets, such as fiat currencies and precious metals. Lending platforms and prediction markets are also common in the industry.
Related: What Shapes the Future of the Institutional Crypto Market?
Famously, DeFi enables yield farming and liquidity mining, providing a niche way to profit from crypto assets that have now gone mainstream.
Blockchain Cities
Entire cities are now embracing the new paradigm and preparing to welcome crypto-savvy citizens. For example, Seoul developed a strategy to become a global leader in blockchain technology by 2019. The then mayor, Park Won-soon, introduced the Blockchain City Seoul Promotion Plan, which would become the foundation for the Fourth Industrial Revolution. Even prior to the presentation, several administrative departments were already using blockchain technology in 2018. However, the new plan would expand the scope of the technology to include direct democracy, online verification, mileage management through the issuance of S-Coin, the Seoul Citizen card, and many others.
The proposed crypto city in Nevada represents a different case. It is an experiment conducted by Jeffrey Berns, the cryptocurrency millionaire who bought land in the state of Nevada and decided to lay the groundwork to build a city based entirely on blockchain. The initiative met opposition from the local government, which has become one of the main obstacles in the path of the creation of the new city. The element of decentralization scared politicians because of the potential for them to lose control. However, the recent congress to hear on Web3 brings hope for reaching common ground regarding this topic.
Notably, Dubai launched its Dubai Blockchain Strategy initiative and became a key part of the United Arab Emirates’ Blockchain Strategy 2021, which aims to migrate at least 50 percent of government transactions to the blockchain. The government saw an economic opportunity for positive transformation in its innovative approaches. Currently, Dubai attracts blockchain evangelists and digital nomads from all over the world.
Related: The Crypto Oasis: How the UAE Became the Middle East’s Digital Assets Champion
Smart governments
It has become apparent that the failure of governments to realize the potential of DeFi and blockchain could put them at risk of economic backwardness in their respective countries. The launch of the central bank digital currency (CBDC) has become the main sign that governments are moving towards the implementation of blockchain-based technology.
The Atlantic Council has developed a tool: to follow all countries in terms of the phases of their various CBDC projects. Note that Ukraine, China, Sweden, South Africa, Malaysia, Singapore, Thailand, South Korea, Saudi Arabia, United Arab Emirates and several others have already launched the trial versions of their CBDCs. At the same time, Nigeria, the Bahamas and Eastern Caribbean countries have launched their CBDCs as work projects.
Some see governments not only as governing institutions, but also as acting service providers. Global economic freedom fueled by DeFi would allow for the selection of governments that offer the best services in terms of quality, speed and efficiency. This concerns in particular the taxation of crypto assets.
Responsibility is freedom
In crypto, your keys means you own your money. You are your own bank. So being responsible for your money does indeed give you the freedom to spend it as you please, capitalize it as you please and communicate on whatever platform or blockchain you want. To quote Michael Ondaatje:
“We are the real countries, not the borders drawn on maps with the names of powerful men.”
Nationality does not mean a location, but belonging to a particular group. One day, an entire group may move to its own metaverse. As competition for qualified professionals can intensify in a visa-free regime, entire cities and countries can devise extraordinary strategies to attract digital nomads. But would they ever settle down with this freedom?
This article does not contain investment advice or recommendations. Every investment and trading move carries risks, and readers should do their own research when making a decision.
The views, thoughts and opinions expressed herein are those of the author only and do not necessarily reflect or represent the views and opinions of Coin-Crypto.
Katia Shabanova is founder of Forward PR Studio, with over 20 years of experience implementing programs for IT companies ranging from Fortune 1000 companies and venture capital funds to pre-IPO startups. She holds a BA in English Philology and German Studies from Santa Clara University in California and a Masters in Philology from the University of Göttingen in Germany. She has been published in Benzinga, Investing, iTwire, Hackernoon, Macwelt, Embedded Computing Design, CRN, CIO, Security Magazine and others.