DeFi will disrupt banks in the future.

Institutional investors have demonstrated their faith in cryptocurrencies, with the majority investing in Bitcoins, while ethereum and decentralized finance (DeFi) are gaining traction.

Cointelegraph spoke with a few bank CEOs and executives to learn their perspectives on the growth of the blockchain industry and how traditional financial institutions are adjusting to the changes.

Siam Commercial Bank, Thailand's oldest commercial bank, focuses on DeFi for its current digital asset push to address the projected disruption in the financial transaction industry.

DeFi, or decentralized financing, is a blockchain-based type of finance that eliminates the interference of traditional financial instruments favouring intelligent contracts on blockchains, the most common is Ethereum. However, Thailand's authorities prefer a hybrid kind of DeFi, combining the standards and efficiency of traditional banking with the security and cost-cutting features of a decentralized protocol.

Siam Commercial Bank's digital currency initiative was launched in February by 10X, the bank's venture arm, with a $50 million seed investment that has already grown to $110 million. The blockchain and DeFi fund, at $110 million, is about half the size of the SCB 10X's $220 million venture capital fund.

Rachid Ajaja, CEO of AllianceBlock, finds parallels between the current blockchain ecosystem and the growth of fintech businesses delivering services via APIs that connect with the banking system. "We will see precisely the same scenario with the bridging of DeFi and financial institutions, and piece by bit, legacy systems will change," Ajaja told Cointelegraph, adding:

"I am convinced that DeFi will utterly upend the global financial system since everything done in conventional finance can be repeated in DeFi at a cheaper cost, with less need for a middleman, new opportunities, and expanded new income sources." "It's just a question of time."

According to Craig Russo, director of innovation at the nonfungible token vault and marketplace protocol PolyientX, financial institutions would most likely embrace open-access protocols while leveraging DeFi technology.

"A major objective of the DeFi movement is to restructure the present economic system to align better incentive structures, which may eventually conflict with the interests of some institutions while opening the way to a new generation of fintech innovation," Russo noted.

In June, the World Economic Forum published a policy toolbox for fair and efficient DeFi laws. The equitable element offers entrepreneurs a reasonable opportunity to be disadvantaged by strict regulatory regulations.