Decentralized Finance (DEFI) in the U. S. economy: A review: Assessing the rise, challenges, and implications of blockchain-driven financial systems. (2024)

¹ Department of Economics, Jack Welch College of Business, Sacred Heart University, Fairfield, USA.

² Department of Business Administration, Afe Babalola University, Ado-Ekiti, Nigeria.

³ Independent researcher, Lagos, Nigeria.

⁴ Independent Researcher, United Kingdom.

⁵ PWC Lagos, Nigeria.

⁶ Dangote Sugar Refinery Plc, Nigeria.

⁷ Spacepointe Limited, River State, Nigeria.

ArticleDOI:10.30574/wjarr.2024.21.1.0321

This study provides a comprehensive analysis of Decentralized Finance (DeFi) within the U.S. economy, focusing on its rise, challenges, and implications. The primary objective is to unravel the concept of DeFi, delineate its role in the U.S. financial landscape, and explore its historical evolution from traditional to blockchain-based finance. Employing a systematic literature review and content analysis, the study synthesizes data from academic journals, industry reports, and regulatory publications. The methodology involves a meticulous selection process, adhering to specific inclusion and exclusion criteria to ensure the relevance and quality of the literature. Key findings reveal that DeFi, underpinned by blockchain technology and smart contracts, offers innovative financial services, enhancing inclusivity and efficiency. However, it faces challenges such as regulatory uncertainties, security concerns, and scalability issues. The study highlights the significant impact of DeFi on the U.S. economy, including technological advancements, economic integration, and regulatory shifts. It also underscores the implications for various stakeholders, including investors, institutions, and regulators. The future landscape of DeFi is poised for growth, marked by technological innovations and potential integration with traditional financial systems. The study concludes with recommendations for industry stakeholders and policymakers, emphasizing the need for clear regulatory frameworks, enhanced security protocols, and consumer education. Future research directions include exploring DeFi's integration with emerging technologies and its role in addressing global financial challenges. This study contributes to the academic discourse on DeFi and offers insights for policymakers, investors, and financial institutions navigating this evolving landscape.

Decentralized Finance (DeFi); U.S. Economy; Blockchain Technology; Financial Regulation

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