Unpacking DeFi and Financial Risk with Hilary J. Allen

Decentralized finance, or DeFi, is a rapidly-growing sector that seeks to use distributed ledger technologies (like cryptocurrencies) to move traditional financial services away from centralized institutions (like banks) and onto the blockchain.

Advocates of DeFi say that by removing intermediaries, banking and financial services will become simpler, more accessible, and more secure. But are they right? Will DeFi revolutionize money for the better, or will it only exacerbate the existing issues and inequalities in our economy?

This week, the Buzz is joined by Hilary Allen, Professor of Law at American University and author of the forthcoming paper "DeFi: Shadow Banking 2.0?". She argues that DeFi mimics many of the same issues that led to the 2008 financial crash, and that allowing DeFi to integrate into our financial systems will magnify risk and increase instability.

The paper: "DeFi: Shadow Banking 2.0?"
Hilary's upcoming book: Driverless Finance

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Intro/Outro Music: Focal Point/Young Community
Courtesy of Epidemic Sound