Article: Open Finance vs. Decentralized Finance

Money, Open Governance


Open Finance vs. Decentralized Finance

Open finance refers to the trend of fintech companies using APIs to build apps that integrate with banking in the traditional financial system. The resulting solutions improve data transparency to enhance service offerings and empower consumers to make better financial decisions.

However, these entities remain grounded in existing centralized infrastructure and fiat currency. In contrast, DeFi applications — which exist on the blockchain — use cryptocurrency and smart contract functionality to eliminate intermediaries and facilitate consumer autonomy.

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