Banking News

Square Announces DeFi Platform

Square Announces DeFi Platform

(16 July 2021 – Global) Jack Dorsey on Thursday put his mobile payments company Square at the centre of one the most talked-about areas of innovation in finance, announcing that it would launch a platform for developers to create “decentralised finance” projects built on bitcoin.

Dorsey said that Square planned to create a “new business” with the “goal of making it easy to create non-custodial, permissionless, and decentralised financial services”, in what would mark one of the first big projects of its kind in the market.

Decentralised finance, or DeFi, is the name given to the growing number of cryptocurrency projects that are trying to build an interlocking financial system denominated in cryptocurrencies that cuts out traditional middlemen.

Mike Brock, who has worked on Square's successful push into cryptocurrencies, will lead the business.

Says Brock: "Technology has always been a story of decentralization. From the printing press, to the internet to bitcoin - technology has the power to distribute power to the masses and unleash human potential for good, and I'm convinced this is the next step."

The new company will be focused on creating a platform business, with an open roadmap, open development, and open source baked in.

The FT reports that private investors have backed more than 70 DeFi companies this year and although the area remains small, its value has ballooned in tandem with the cryptocurrency bull market. The assets in DeFi products have grown from about $2bn a year ago to more than $55bn today, according to data from DeFi Pulse.

The freewheeling space has also captured the attention of regulators, who have raised concerns about the security and accountability of projects, as well as the potential for fraud. Dan Berkovitz, commissioner at the US Commodity Futures Trading Commission, has asserted that many DeFi apps could be illegal. 

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