We look into the transformative role of blockchain and Decentralized Finance (DeFi) in the global financial system, particularly regarding financial inclusion. They explain how traditional finance, despite its stability, suffers from inefficiencies like high costs and limited access, issues that DeFi seeks to address through decentralized, transparent, and immutable transactions. The texts categorize different types of blockchains (public, private, hybrid) and explain core DeFi concepts like lending platforms and automated market makers, highlighting their security features through cryptography and consensus mechanisms. Several sources specifically examine how blockchain and DeFi can increase access, improve quality, build trust, and enhance usage of financial services, especially for the unbanked and underserved populations globally, citing benefits like reduced transaction fees and faster cross-border payments. However, they also acknowledge challenges such as regulatory hurdles, digital literacy gaps, and technical risks inherent in this evolving technology.
