The DeFi Education Fund, an organization advocating for decentralized finance, has put forth a proposal to leverage DeFi technology to reduce costs, with the ultimate aim of addressing poverty both within the United States and on a global scale.
In a blog post published on Wednesday, the group stated that DeFi infrastructure could potentially save unbanked and underbanked individuals worldwide approximately $30 billion annually by lowering remittance costs. The organization highlighted instances of workers sending funds home and incurring fees, noting that these costs could be reduced "by up to 80%" through the adoption of DeFi.
The DeFi Education Fund explained, "The poverty premium—the expenses incurred by low-income households that wealthier individuals are often able to access at a lower cost—persists because the current, layered, antiquated financial infrastructure makes it expensive to serve low-income customers profitably." They further elaborated:
Nothing is free, and DeFi doesn’t eliminate costs entirely, but by removing intermediaries and leveraging software rather than outdated financial systems, we can dramatically reduce the cost of financial services for everyday people and give them greater control of their finances.
Numerous advocates have proposed various applications of blockchain technology to address factors contributing to poverty. These proposals often focus on reducing transaction times, eliminating or significantly lowering fees, and enhancing access to financial services. The DeFi Education Fund specifically pointed to the increasing costs in the U.S. associated with cashing paychecks without a bank account, using money orders, and the expenses related to homeownership.
The fund also noted that while currently only 3% of Americans are highly familiar with DeFi, there is considerable openness to its fundamental proposition. A majority of American adults find DeFi features appealing: 56% value having complete personal control over their money at all times, 54% want full personal control over the security of their personal and financial data, and 53% want to be able to view their complete financial history at all times.
Navigating Policies and Laws Favorable to DeFi
In the United States, lawmakers in Congress are moving closer to considering a comprehensive bill that would establish a market structure for digital assets. Although Republicans on both the Senate Agriculture Committee and the Senate Banking Committee have released discussion drafts for this legislation, uncertainties remain regarding the final form of the bill following bipartisan negotiations.
In October, several Senate Democrats on the banking committee reportedly expressed reservations about the Republicans' draft bill concerning DeFi. These lawmakers submitted a proposal that could potentially restrict decentralized finance protocols under certain conditions.
The market structure bill, which experienced delays due to a 43-day government shutdown that concluded recently, is reportedly progressing. Senate Banking Chair Tim Scott has indicated that he anticipates the bill being signed into law by early 2026.