“DeFi is dead.” Here’s how Maple Finance CEO and co-founder Sid Powell sums up what he sees for cryptocurrencies in the coming years.
However, this does not mean the end of decentralized finance; rather, it is the aim of treating DeFi as something separate from traditional markets.
“In a couple of years, institutions will not distinguish between DeFi and TradFi at all,” Powell told CoinDesk in an interview. “Over time, all capital markets activity will be carried out on-chain.”
Think of it this way: Before the Internet, people bought goods and services the traditional way: by physically going to merchants. After the Internet and e-commerce revolution, people still buy, but most do so with just one or two clicks.
In Powell’s view, blockchains will play a similar role in the financial services sector. Chain finance is simply the next technological layer that global markets will sit on, in the same way that the Internet changed the way people shop.
Most people and businesses now rely more on e-commerce platforms like Amazon or Alibaba to purchase their goods and services because it is an easier, more efficient, and sometimes cost-effective way to find the best product or value.
Powell expects a similar shift in the legacy financial services sector, where cryptocurrencies become the infrastructure for capital markets, and most transactions are cleared and settled using public ledgers rather than legacy systems. He also sees more debt capital markets adopting crypto-native structures, including BTC-backed mortgages and other asset-backed securities linked to crypto loans, as well as crypto card issuers whose receivables can be securitized and sold in the capital markets.
Of course, an appropriate regulatory framework will need to be established before this shift occurs.
And who will use this new financial system? Sovereign wealth funds, pension managers, insurers and large asset managers, or “the managerial class that controls the world’s financial markets,” as Powell puts it, will be the main holders of this new “chain paper.”
This is what Powell means when he says, “DeFi is dead,” where blockchain technology becomes the dominant infrastructure layer, without even thinking twice that people are using a new technology to conduct their everyday financial transactions.
The reason for the 50 trillion dollars
While full reform could take time, signs of that change are already being felt throughout the system.
Take stablecoins as an example. Following the passage of the GENIUS Act, financial giants are adopting or considering its use en masse. PayPal has launched PYUSD, Société Générale has issued euro- and dollar-pegged stablecoins through its crypto unit, and Fiserv has introduced FIUSD for use in payment networks, while Wall Street giants including Bank of America (BAC), Citi, and (C) Wells Fargo (WFC) have expressed interest in doing the same.
Visa (V) and Mastercard (MA) are not issuing coins, but are building stablecoin settlement avenues that could accelerate adoption and intensify competition with tokenized deposits and other digital money managed by banks.
This is where Powell’s most aggressive prediction about the new shift in the financial system comes into play: stablecoins could process $50 trillion in transactions by 2026, dwarfing major card networks.
It frames stablecoins as a powerful but still underrated tool for merchants and small businesses. Retailers already operate on thin margins, paying 2% to 3% to Visa and Mastercard on card payments.
Using stablecoins for settlement can significantly reduce this cost, effectively returning several percentage points of revenue to merchants.
That economic incentive, Powell argues, will prompt small businesses to quickly adopt stablecoins, while neobanks and, eventually, traditional banks directly issue and support them.
He even went so far as to compare large stablecoin issuers to insurers like Berkshire Hathaway, as they enjoy a negative cost of capital. Users deposit dollars and issuers deposit those funds in safe assets, such as Treasury bills, earning a return without paying interest on their liabilities. If they trade prudently, the spread between what they earn and what they owe becomes a powerful driver for compounding returns, similar to how Warren Buffett leveraged the insurance float.
Trillion dollar market
What does this mean for the DeFi market as it exists today?
It could reach up to $1 trillion in the next two years, Powell says. The space is cyclical and macrodependent, but says it is growing faster than traditional finance and is closely tied to the trajectory of stablecoins and tokenized assets. The total DeFi market capitalization is currently around $69 billion, according to data from CoinMarketCap.
As the circulating supply of stablecoins grows and more crypto-native and real-world assets are tokenized, expect the total value locked in DeFi to increase in tandem.
In his view, the growth of DeFi is ultimately “a function of the market capitalization of stablecoins and tokenized assets.”
Taken together, Powell’s vision has less to do with cryptocurrencies versus traditional finance and more to do with how entirely traditional finance goes crypto-native. If he is right, the “death of DeFi” will not only erase the distinction between DeFi and TradFi; will disappear into the pipes of a new blockchain-based market infrastructure.
