“DeFi is dead.” This is how Sid Powell, CEO and co-founder of Maple Finance, sums up his views on the future of cryptocurrencies in the next few years.
However, this does not mean the end of decentralized finance; rather, it marks the end of viewing DeFi as something separate from traditional markets.
“In a few years, institutions won’t be able to differentiate between DeFi and TradFi at all,” Powell explained in an interview with CoinDesk. “Ultimately, all capital market activities will be conducted on-chain.”
Think of it this way: Before the Internet, people would buy goods and services the old-fashioned way—by going to a merchant in person. After the internet and e-commerce revolution, people are still shopping, but most are done with just one or two clicks.
In Powell’s view, blockchain will play a similar role in financial services. On-chain finance is just the next layer of technology that global markets will rely on, just as the Internet changed the way people shop.
Most people and businesses now rely more on e-commerce platforms such as Amazon or Alibaba to purchase goods and services because it is an easier, more efficient and sometimes more cost-effective way to find the best product or value.
Powell expects a similar shift to occur in traditional financial services, where cryptocurrencies become the infrastructure of capital markets and most transactions are cleared and settled using public ledgers rather than traditional systems. He also sees more debt capital markets adopting crypto-native structures, including Bitcoin-backed mortgages and other asset-backed securities related to crypto lending, as well as crypto card issuers whose receivables can be securitized and sold to the capital markets.
Of course, before this transition can occur, an appropriate regulatory framework needs to be in place.
Who will use this new financial system? Sovereign wealth funds, pension managers, insurance companies and large asset managers, or what Powell calls “the management class that controls the world’s financial markets,” will be the major holders of this new “on-chain note.”
This is what Powell meant when he said “DeFi is dead” and blockchain technology becomes the dominant infrastructure layer, without even considering that people are using the new technology to conduct daily financial transactions
The case for $50 trillion
While comprehensive reform may take time, signs of the change are already being felt throughout the system.
Take stablecoins as an example. With the passing of Genius Acts, financial giants are adopting or considering their use en masse. PayPal launched PYUSD, Société Générale issued a stablecoin pegged to the euro and US dollar through its crypto arm, Fiserv launched FIUSD that can be used in payment networks, and Wall Street giants including Bank of America (BAC), Citigroup and (C) Wells Fargo (WFC) have expressed interest in following suit.
Visa (V) and Mastercard (MA) are not issuing tokens but are building stablecoin settlement tracks to accelerate adoption and intensify competition with tokenized deposits and other bank-led digital currencies.
That’s Powell’s most radical prediction of a new shift in the financial system: stablecoins could handle $50 trillion in transactions by 2026, more than major bank card networks.
He sees stablecoins as a powerful but still undervalued tool for merchants and small businesses. Retailers already operate on razor-thin margins and pay fees of 2%-3% on Visa and Mastercard card payments.
Using stablecoins for settlement can significantly reduce this cost, effectively returning a few percentage points of revenue to merchants.
Powell believes that this economic incentive will drive rapid adoption of stablecoins by small businesses, while neobanks and eventually traditional banks will directly issue and support stablecoins.
He even compared large stablecoin issuers to insurance companies like Berkshire Hathaway because of their negative cost of capital. Users deposit U.S. dollars, and issuers park those funds in safe assets, such as Treasury bills, earning income without paying interest on the liability. If they operate prudently, the spread between what they earn and what they owe becomes a powerful engine of compounding returns, similar to how Warren Buffett uses insurance float.
trillion dollar market
What does this mean for today’s DeFi market?
Powell said that number could reach $1 trillion in the next few years. The space is cyclical and macro-dependent, but he said it is growing faster than traditional finance and is closely aligned with the trajectory of stablecoins and tokenized assets. According to data from CoinMarketCap, the current total market value of DeFi is approximately US$69 billion.
As the circulating supply of stablecoins grows and more real-world and crypto-native assets are tokenized, he expects the total value locked in DeFi to rise in tandem.
In his view, the growth of DeFi is ultimately “a function of the market cap of stablecoins and tokenized assets.”
Overall, Powell’s vision is less about crypto versus traditional finance and more about how traditional finance can become fully native to crypto. If he is right, then the “death of DeFi” will not only blur the distinction between DeFi and TradFi, but also the lines between them. It will disappear into the pipeline of new blockchain-based market infrastructure.
