Kraken CEO Jesse Powell Says ‘DeFi Is Really Eating the World of Finance’

In a recent interview with Yahoo Finance, Kraken Co-Founder and CEO Jesse Powell talked about Bitcoin, Ethereum, decentralized finance (DeFi), tokenization of stocks, and Dogecoin (DOGE).

Below are a few highlights of the comments the Kraken CEO made during his discussion with Yahoo Finance’s Akiko Fujita and Zack Guzman.

Equity Markets

Powell argues that the lack of transparency in equity markets makes it easy for “bad things” to happen:

… people that started trading with cryptocurrencies first are shocked to find out how the equities markets actually work, with so many middlemen in the process, not actually owning your stocks, having someone else technically own them, having someone else custody them, not being able to move them wherever you want instantly…

It’s a very different system, and I think it’s a system that is really no longer necessary now that we have a crypto system. And I think we’d be much better off with a bare instrument system where people can take their shares, move them anywhere they want, trade them anywhere they want, and trade directly on exchange.

And because they can’t do that now… you have so many opportunities for bad things to happen… And the little guy really is at a disadvantage in a system like that.

Ethereum and DeFi

… Ethereum gives you access to a whole world of decentralized smart contracts, decentralized exchanges, lending protocols. DeFi is really eating the world of finance, whether people know it or not yet. I think 10 years from now, we’re all going to be doing 90% of our financial services on a blockchain.

Tokenization of Stocks

I think it’s going to be up to the regulators and the lawmakers to allow for this to happen. I mean, there’s technically nothing preventing this from happening today. Conceivably Kraken could buy a bunch of Apple shares, tokenize them, and allow people to buy them and trade them even on a decentralized exchange. So what we really need is some innovation in the regulatory and legislative space. The technology is there today.

Bitcoin

I think we’re still extremely early in the space… You still hear people asking you who the CEO of Bitcoin is. So I think there’s not the understanding there yet, but I think with more players getting into it — PayPal is getting into it, CashApp is getting into it — I think those guys with that retail reach will expose Bitcoin to more consumers, and more consumers will start to realize the value of it, start to use it as a store of value, start to use it as a transactional currency.

Dogecoin (DOGE)

Dogecoin has been around for a long time. It started as a meme. It started as a joke, but it has gained a lot of traction with the online– the Reddit community, the online meme community… The internet has taken a liking to it. I would not see it in the same category as Bitcoin as a store of value. But it is certainly a fun coin… it’s a good way to get in and start experimenting.

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