BIS THINKS DEFI HAS NO USE CASES, BUT CZ IS BULLISH: FINANCE REDEFINED

Last updated: June 19, 2025, 22:29 | Written by: Olaf Carlson-Wee

The world of Decentralized Finance (DeFi) is a battlefield of opinions, a landscape where traditional financial institutions clash with the innovative spirit of the crypto community.This past week has been a microcosm of this ongoing struggle, showcasing both the potential pitfalls and the soaring ambitions within the DeFi ecosystem.While the market saw a late bullish surge with most top 100 DeFi tokens trading in the green, regulatory scrutiny intensified with the United States Commodity Futures Trading Commission (CFTC) launching investigations into several DeFi protocols. cointelegraph.com: Binance CEO Changpeng Zhao says DeFi will outpace CeFi in the next bull run, but the Bank for International Settlements is skeptical.Adding fuel to the fire, Binance CEO Changpeng ""CZ"" Zhao boldly predicted that DeFi would not only survive but would outpace Centralized Finance (CeFi) in the next bull run.This optimistic forecast, however, is directly challenged by the Bank for International Settlements (BIS), which recently released a skeptical report questioning the very existence and real-world applicability of a pure DeFi model.This stark contrast highlights the fundamental debate surrounding DeFi: is it a revolutionary force poised to reshape finance, or a flawed experiment destined to collapse under its own weight?Let's dive deep into the week's key developments and analyze the arguments from both sides.

The DeFi Market's Rollercoaster Week

The week began with uncertainty hanging over the DeFi market, fueled by ongoing regulatory concerns.However, as the week progressed, a wave of optimism swept through, leading to a significant recovery for many DeFi tokens. The crypto and decentralised finance (DeFi) ecosystem has grown rapidly, spurred by speculation and rising acceptance of cryptoassets in mainstream finance. Cryptoassets are increasingly being integrated into exchange-traded funds, futures and other conven-tional financial instruments. However, despite total market capitalisation exceeding thatThis surge suggests a strong underlying belief in the long-term potential of DeFi, even amidst regulatory headwinds. Binance CEO Changpeng Zhao says DeFi will outpace CeFi in the next bull run, but the Bank for International Settlements is skeptical. The post BIS thinks DeFi has no use cases, but CZ is bullishBut how sustainable is this growth, and what factors are driving these market fluctuations?

DeFi Token Performance

According to data from Cointelegraph Markets Pro and TradingView, the top 100 DeFi tokens by market capitalization experienced a late bullish surge.This indicates a growing investor appetite for DeFi projects, despite the inherent risks and volatility associated with this nascent industry. cryptonews altcoinnews blockchainnews BIS thinks DeFi has no use cases, but CZ is bullish: Finance RedefinedWelcome to Finance Redefined, your weekly doseSome key observations include:

Positive Weekly Performance: The majority of top DeFi tokens traded in the green on the weekly charts, showcasing a market-wide recovery.
Increased Trading Volume: The surge in prices was often accompanied by increased trading volume, suggesting genuine investor interest rather than artificial pumps.
Individual Project Success: While the overall market saw a positive trend, some individual projects outperformed others, highlighting the importance of project-specific factors such as innovation, community support, and utility.

This bullish trend should be viewed with cautious optimism. Binance CEO Changpeng Zhao says DeFi will outpace CeFi in the next bull run, but the Bank for International Settlements is skeptical. Welcome to Finance Redefined, your weekly dose of essential decentralized finance (DeFi) insights a newsletter crafted to bring you the most significant developments from the past week.The past week in the DeFiThe DeFi market remains highly volatile and susceptible to sudden corrections.Investors should conduct thorough research and understand the risks before investing in any DeFi project.

Regulatory Scrutiny: CFTC Investigations

The growth of DeFi has not gone unnoticed by regulatory bodies.The CFTC's investigation into multiple DeFi protocols marks a significant escalation in regulatory scrutiny. The past week in the DeFi ecosystem was filled with ups and downs, from the United States Commodity Futures Trading Commission s (CFTC) investigation into multiple DeFi protocols to Binance CEO Changpeng CZ Zhao s forecast that DeFi would outgrow centralized finance (CeFi) in the next bull run. While CZ anticipates a bright future forThis investigation raises important questions about the future of DeFi and its relationship with existing regulatory frameworks.

What is the CFTC Investigating?

While the specific details of the CFTC's investigation remain confidential, it is likely focused on whether these DeFi protocols are operating in compliance with existing commodity regulations. BIS thinks DeFi has no use cases, but CZ is bullish: Finance RedefinedKey areas of concern may include:

Unregistered Securities Offerings: Whether DeFi protocols are offering or facilitating the trading of unregistered securities.
Commodity Pool Operator (CPO) Registration: Whether DeFi protocols are acting as CPOs without proper registration.
Derivatives Trading: Whether DeFi protocols are facilitating the trading of derivatives in violation of CFTC regulations.

This regulatory pressure is a double-edged sword. Binance CEO Changpeng Zhao says DeFi will outpace CeFi in the next bull run, but the Bank for International Settlements is skeptical. Welcome to Finance Redefined, your weekly dose of essential decentralized finance (DeFi) insights a newsletter crafted to bring you the most significant developments from the past week. The past week in the DeFi ecosystem was filled with ups and downs, fromOn one hand, it creates uncertainty and could stifle innovation. Data from Cointelegraph Markets Pro and TradingView shows that DeFi s top 100 tokens by market capitalization had a late bullish surge, with most tokens trading in the green on the weekly charts.On the other hand, it could lead to greater legitimacy and mainstream adoption of DeFi if protocols can demonstrate compliance and work within existing regulatory frameworks.

The Potential Impact on the DeFi Ecosystem

The outcome of the CFTC's investigation could have significant implications for the DeFi ecosystem. BIS thinks DeFi has no use cases, but CZ is bullish: Finance Redefined Welcome to Finance Redefined, your weekly dose of essential decentralized finance (DeFi) insights a newsletter crafted to bring you the most significant developments from the past week. The past week in the DeFi ecosystem was filled with ups andPossible scenarios include:

Increased Compliance Requirements: DeFi protocols may be forced to implement stricter compliance measures, such as KYC/AML procedures, which could increase costs and reduce user privacy.
Regulatory Enforcement Actions: DeFi protocols found to be in violation of CFTC regulations could face fines, cease-and-desist orders, or other enforcement actions.
Greater Regulatory Clarity: The investigation could lead to greater regulatory clarity regarding the legal status of DeFi protocols, which could provide greater certainty for investors and developers.

The DeFi community needs to actively engage with regulators to shape the future of DeFi regulation. Binance CEO Changpeng Zhao says DeFi will outpace CeFi in the next bull run, but the Bank for International Settlements is skeptical. Welcome to Finance Redefined, your weekly dose of essential decentralized finance (DeFi) insights a newsletter crafted to bring you the most significant developments from the past week.This includes advocating for sensible regulations that protect consumers without stifling innovation.

CZ's Bullish Prediction: DeFi to Outpace CeFi

Despite the regulatory uncertainty, Binance CEO Changpeng ""CZ"" Zhao remains optimistic about the future of DeFi.CZ predicts that DeFi will outpace CeFi in the next bull run, citing the inherent advantages of DeFi, such as transparency, decentralization, and accessibility.

Why is CZ So Bullish on DeFi?

CZ's bullish prediction is based on several key factors:

Transparency: DeFi protocols are typically built on open-source code, making them more transparent than traditional financial institutions.
Decentralization: DeFi protocols are not controlled by a single entity, reducing the risk of censorship and manipulation.
Accessibility: DeFi protocols are accessible to anyone with an internet connection, regardless of their location or financial status.
Innovation: DeFi is a hotbed of innovation, with new protocols and applications constantly being developed.

CZ believes that these advantages will attract more users and capital to DeFi in the future, ultimately leading to its dominance over CeFi.

Challenges to CZ's Prediction

While CZ's vision is compelling, it's important to acknowledge the challenges that DeFi faces:

Scalability: Many DeFi protocols struggle with scalability, which can lead to high transaction fees and slow transaction times.
Security: DeFi protocols are vulnerable to hacks and exploits, which can result in significant financial losses for users.
Complexity: DeFi protocols can be complex and difficult to understand, making them inaccessible to the average user.
Regulation: As discussed earlier, regulatory uncertainty remains a major obstacle to the mainstream adoption of DeFi.

Overcoming these challenges is crucial for DeFi to realize its full potential and fulfill CZ's prediction.

BIS's Skeptical View: DeFi Has No Use Cases

In stark contrast to CZ's bullish outlook, the Bank for International Settlements (BIS) has expressed skepticism about the long-term viability of DeFi.The BIS argues that a pure form of DeFi cannot survive independently and has little use case in the real world. While CZ anticipates a bright future for DeFi, a report from the Bank for International Settlements (BIS) argues that a pure form of DeFi cannot survive independently and has little use case in the real world.This critical assessment highlights the fundamental differences in perspective between traditional financial institutions and the DeFi community.

Why is the BIS So Skeptical?

The BIS's skepticism stems from several key concerns:

Reliance on CeFi: The BIS argues that DeFi is not truly decentralized, as it relies on centralized infrastructure such as stablecoins and oracles.
Lack of Scalability: The BIS believes that DeFi's scalability limitations make it unsuitable for widespread adoption.
Governance Challenges: The BIS questions the effectiveness of DeFi's governance mechanisms, arguing that they are prone to manipulation and lack accountability.
Regulatory Arbitrage: The BIS fears that DeFi is being used to circumvent existing regulations, posing a risk to financial stability.

The BIS views DeFi as a flawed experiment that is unlikely to replace traditional finance.

The BIS's Alternative Vision

The BIS advocates for a more gradual and regulated approach to incorporating blockchain technology into the financial system.They believe that central bank digital currencies (CBDCs) and regulated stablecoins are more promising avenues for innovation than pure DeFi.

The BIS's stance reflects a more cautious and conservative approach to financial innovation, prioritizing stability and regulatory oversight over rapid disruption.

Analyzing the Contrasting Views: CZ vs.BIS

The contrasting views of CZ and the BIS represent two fundamentally different perspectives on the future of finance.CZ sees DeFi as a revolutionary force that can democratize access to financial services and create a more transparent and efficient financial system.The BIS, on the other hand, views DeFi as a risky and unstable experiment that is unlikely to replace traditional finance.So, who is right?The truth likely lies somewhere in between.

The Strengths of DeFi

DeFi offers several potential advantages over traditional finance:

Greater Accessibility: DeFi can provide access to financial services to individuals who are excluded from the traditional financial system.
Lower Costs: DeFi can reduce transaction costs by eliminating intermediaries.
Increased Transparency: DeFi can provide greater transparency into financial transactions.
Greater Efficiency: DeFi can automate many financial processes, making them more efficient.

These advantages make DeFi a potentially powerful tool for financial inclusion and innovation.

The Weaknesses of DeFi

DeFi also faces several significant challenges:

Scalability Issues: DeFi struggles to handle large volumes of transactions, leading to high fees and slow processing times.
Security Risks: DeFi protocols are vulnerable to hacks and exploits, putting users' funds at risk.
Regulatory Uncertainty: The lack of clear regulations creates uncertainty and discourages institutional adoption.
Complexity: DeFi protocols can be complex and difficult to understand, making them inaccessible to the average user.

Addressing these weaknesses is crucial for DeFi to achieve mainstream adoption.

The Path Forward: Bridging the Gap Between CeFi and DeFi

The future of finance is likely to involve a combination of CeFi and DeFi.Rather than viewing them as competing forces, it's more productive to explore how they can complement each other.A hybrid approach that leverages the strengths of both CeFi and DeFi could create a more efficient, inclusive, and resilient financial system.How can this be achieved?

Potential Synergies Between CeFi and DeFi

Here are some potential ways in which CeFi and DeFi could work together:

CeFi-DeFi Gateways: CeFi platforms could provide users with access to DeFi protocols, making it easier for them to participate in the DeFi ecosystem.
Hybrid Financial Products: New financial products could be created that combine elements of both CeFi and DeFi.
Regulated DeFi Platforms: DeFi platforms could operate under regulatory frameworks, providing greater security and stability for users.

By fostering collaboration between CeFi and DeFi, we can create a financial system that is both innovative and reliable.

The Importance of Education and Awareness

Ultimately, the success of DeFi will depend on educating the public about its potential benefits and risks.Increased awareness will help to drive adoption and ensure that DeFi is used responsibly.Education initiatives should focus on:

Explaining the Basics of DeFi: Providing clear and concise explanations of DeFi concepts and terminology.
Highlighting the Benefits of DeFi: Showcasing the potential advantages of DeFi, such as greater accessibility, lower costs, and increased transparency.
Addressing the Risks of DeFi: Educating users about the risks associated with DeFi, such as hacks, scams, and regulatory uncertainty.

By empowering users with knowledge, we can create a more informed and responsible DeFi community.

Conclusion: DeFi's Uncertain Future

The debate between CZ's bullish vision and the BIS's skeptical view highlights the inherent uncertainty surrounding the future of DeFi.While CZ sees DeFi as a revolutionary force poised to disrupt traditional finance, the BIS remains unconvinced, citing scalability limitations, security risks, and regulatory challenges.The truth, as is often the case, likely lies somewhere in the middle.DeFi undoubtedly possesses the potential to democratize access to financial services, reduce costs, and increase transparency.However, it also faces significant hurdles that must be overcome before it can achieve mainstream adoption.The regulatory landscape is constantly evolving, and it remains to be seen how DeFi will fit within existing regulatory frameworks.Regardless of the ultimate outcome, the ongoing debate surrounding DeFi is crucial for shaping the future of finance.Key takeaways:

DeFi faces both opportunities and challenges in its quest for mainstream adoption.
Regulatory scrutiny is increasing, and DeFi protocols need to adapt to comply with existing regulations.
Collaboration between CeFi and DeFi could create a more efficient and inclusive financial system.
Education and awareness are essential for empowering users and fostering responsible DeFi adoption.

The coming years will be critical for determining whether DeFi can live up to its promise and transform the financial landscape.Whether you side with CZ's optimism or the BIS's skepticism, one thing is clear: DeFi is a force to be reckoned with, and its impact on the future of finance will be significant.