Banking in India, how DeFi might integrate itself into the developing economies

As a decentralized banking system, DeFi offers many potential opportunities for developing nations. Already becoming progressively more popular in developed countries such as the U.S. and EU, DeFi is posed to take off in LDCs like India and other Asian markets. Both potential and constraints exist within DeFi’s possible integration into developing economies like India. The Nimbus platform aims to be a game-changer in accessing the DeFi system in India. They will be launching in India this August. Let’s dive deeper.

How DeFi Might Be Integrated in India

India could be a huge potential market for decentralized finance (DeFi) unless the country’s government cracks down on crypto again. DeFi is poised to expand in India, tapping into the country’s underbanked and unbanked population. However, cryptocurrency’s legal status in India is on shaky ground, as the government reportedly considers a ban on crypto. According to experts, India is on the brink of emerging as a leader for DeFi in Asia. Industry leaders in India believe it’s vital to the country’s future prosperity.

The DeFi platform Nimbus sees huge growth potential in India based on its extensive network of partners. They plan on launching their cryptocurrency platform in India this coming August and hope to see impressive returns. Although Nimbus doesn’t have plans to make a special product for the Indian market, they said they are planning on having more than 20,000 new users in India by the end of the year.

Potential for Integration

For low-income workers in rural areas who have less access to both technology and communication, DeFi provides the opportunity to improve their livelihood. Additionally, with DeFi readily available, physical access (which may not exist in rural areas) to loans and deposits is not a necessity. It is worth noting that investments and banking methods in developing countries might be in less developed stages as compared to developed nations, creating a niche for DeFi to fill. With the new and improved availability of DeFi there are investment options available through either BTC, ETH, or stable coins. This in turn creates new room for investors to store their money than what currently exists within traditional banking.

Cryptocurrency has the potential to raise consumption levels which will create a larger middle class and lead more countries into the launch stage of economic development. This could also lead the way for future investments. The cryptocurrency market is independent of the Central Bank and its monetary policies which means its value and economic growth is independent of the economic situation of the country itself. This lends a greater incentive to invest in cryptocurrency where the value and returns are greater than within traditional banking. Less developed countries (LDCs) built with little to no infrastructure could be the easiest place for such systems to thrive because there is not an existing foundation to build up and also no competing industry in opposition to it.

Nimbus has a multi-pronged method for integrating its platform into Indian society and increasing its user base to benefit the Indian people and economy. Some of their initiatives include their plan to invest all their revenue options to locals. For now, they are focused on staking for 60 days because it is the best option for integration. Nimbus also plans on bringing in eco-initiatives to further develop their integration plan. Nimbus related technology, as well as blockchain, have become a highly demanded technology in India. Although Nimbus doesn’t have that many users today, they anticipate exponential growth once they launch in India later this year.

Constraints

Laws for cryptocurrencies and DeFi regulations do not yet exist in many developing countries. There is a greater risk that if investments or speculations create losses or if a crypto/DeFi wallet is stolen that there would not be any laws to ensure accountability. This area will need more regulation in the near future. The argument can be made that for DeFi and blockchain to be considered, other infrastructures need to exist to make this possible. For example, DeFi may only benefit the computer literate of the developing world and not target the rural poor that these aid projects are designed to help. There is a barrier to entry due to bureaucracy and corruption in developing nations which means building infrastructure with taking longer and lead to higher costs.

Due to laws on blockchains, in some areas cryptocurrency doesn’t exist and as such these projects may not be allowed to take place. Additionally, some people in developing nations lack the education to understand how to use cryptocurrency and blockchain safely and wider access to information will need to be provided to amend this issue.

Summary

As a relatively new platform, Nimbus is a DAO-governed ecosystem of dApps that offers revenue streams for users based on IPO participation, lending/borrowing, crypto-trading and more. Their new project launching in India this August is directed towards establishing a decentralized banking system based on blockchain technology. Nimbus sees huge growth potential in the Indian market, which is why they are launching their service there later this year. They plan on having more than 20,000 new users in India by the end of this year. They anticipate exponential growth once launched. 

There are many potential benefits to the economy in India if DeFi is successfully implemented. These include rural financial inclusion and increased government transparency. The constraints include certain legalities and limits on the existing economic infrastructure. The groups the project aims to support may be unwilling to try unfamiliar technologies. The main demographic could remain the younger generation, who are generally more tech-savvy and eager to use new methods. However, the benefits outweigh the constraints, as the implementation of DeFi in developing nations such as India could positively impact low-income families and provide opportunities to improve the livelihoods of millions. It is yet to be seen how this implementation will play out in the future.

(Disclaimer- Brand Desk Content)