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Do Banks Now Have Their Sights Set on DeFi?

2 mins
Updated by Geraint Price
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In Brief

  • Banks are rapidly focusing their activities on DeFi protocols.
  • Japanese financial services firm Nomura invested in the DeFi protocol, Infinity.
  • Credit Suisse participated in an investment round for Taurus SA.
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Traditional banks and DeFi were once considered arch-rivals. But are banks considering entering the DeFi space now?

As decentralized finance (DeFi) rises in popularity, experts like Mark Cuban believe that traditional banks should be running scared. DeFi provides most of the facilities of traditional financial institutions, such as lending and borrowing, earning yield on investments, etc.

But, in the rapidly growing area of tech, firms must adapt to the latest innovations to survive. Hence, banks have rapidly shown interest in DeFi. According to a Bloomberg report, the Japanese financial services firm Nomura is investing in DeFi protocol Infinity

Nomura Gets DeFi Exposure After Launching Digital Asset Division 

The Japanese financial services firm Nomura launched its digital asset division, Laser Digital, in Mar. 2022. Later, Laser Digital announced a trading division for institutional clients in Nov. 2022.

Now, Nomura’s digital asset division marks its footprint in DeFi with investment in an institutional lending and borrowing protocol, Infinity. None of the parties have yet revealed the details, such as the investment size.

Olivier Dang, the head of ventures for Laser Digital, told Bloomberg: “Infinity’s groundwork paves the way for institutional flows on-chain, new levels of rates, and risk innovation.” 

Credit Suisse Leads Investment Round for Digital Assets Company Taurus SA

Bloomberg reports that the Switzerland-based digital assets infrastructure developer raised $65 million from Credit Suisse, Deutsche Bank AG, Pictet Group, Arab Bank Switzerland Ltd, and Investis Holding SA.

With the help of Taurus, Credit Suisse aims to expand its digital assets offerings. Daniel Gorrera, the head of digital assets at Credit Suisse, said, “The fact we are making such an investment is a clear testament that there is a future in digital assets. It is part of the overall strategy of Credit Suisse.”

It is worth noting that last year, one of the world’s largest banks, JPMorgan, made its first DeFi transaction with Singapore’s central bank. 

Industry Stakeholders Believe Mainstream Banks Have Eyes on DeFi

Robert Quartly-Janeiro, the Chief Strategy Officer (CSO) at Bitrue Exchange, told BeInCrypto:

“Mainstream banking institutions have set their eyes on DeFi platforms, as showcased in Nomura’s investment in Infinity, as well as Credit Suisse’s backing of Taurus.

“Despite the building distrust in the broader crypto ecosystem, the trustless technology showcased by DeFi platforms comes off as a key bridge to the future of finance, and banks are catching in on the action. The recent enforcement actions on centralized crypto outfits further increase DeFi’s attractiveness. With the underlying model of decentralized liquid staking and general product offering largely different from those offered by platforms like Kraken, these DeFi protocols remain a safe bet for financial giants.”

Further, the community believes that the mass adoption of DeFi by financial institutions is gaining momentum.

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Harsh Notariya
Harsh Notariya is a journalist at BeInCrypto, who writes about various topics, including decentralized physical infrastructure networks (DePIN), tokenization, crypto airdrops, decentralized finance (DeFi), meme coins, and altcoins. Before joining BeInCrypto, he was a community consultant at Totality Corp, specializing in the metaverse and non-fungible tokens (NFTs). Additionally, Harsh was a blockchain content writer and researcher at Financial Funda, where he created educational reports on...