The rise of DeFi in 2020 is truly impressive.  It was reported in the last few days that the amount of money locked in DeFi applications crossed $12 billion.  This is an enormous jump from earlier in the year when it barely registered a billion.

Obviously, this is putting the established financial system on notice.  While the numbers are small compared to the present system, the regulators are rapidly being backed into a corner.

At the top of the list is the United States Government.  Since the USD is the global reserve currency, this single country can exert great influence over the entire financial system.  Banks all over the world have to succumb to their will no matter how detrimental it might be to the bank's customers.


We now see a proposal being bantered around to reduce FinCen's limits on reporting for AML purposes from $3,000 to $250.  This seeks to change a rule that has been in place in the mid 1990s.

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There is little doubt that the success of cryptocurrency and the related applications, even while small, is having an impact.  The established system is feeling things slipping away as alternative avenues of financial transactions crop up.

It is a situation that governments and the banking world is not accustomed to.  They are not use to giving up power.  Instead, over time, they just keep amassing more.

However, when things start to slip away, the tendency is to hold on tighter.  We saw a major power grab take place as a result of COVID-19.  This could end up backfiring as millions start to rebel.

The same could happen in the world of money.  There is estimated to be around 1.7 billion people who are considered unbanked.  This means they have no access to even basic banking services.  The idea of sending, receiving, and storing money through a third party is not part of their lives.  They still operate on a cash/barter basis.

A simple cryptocurrency wallet fulfills the most basic needs.  From here, one can send, receive, and store money just like they do in a bank.  It can also be done without the use of KYC/AML.

Which brings up another point that the US Government has pushed over the years.  In the quest to "control" all that takes place, billions were forced into situations where they were basically starved.  In many parts of the world, proving who you are is near impossible.  Paperwork is non-existent making it difficult to show the proper documentation for personal identity.

Cryptocurrency does not care about any of this.  In fact, crypto advocates prefer it this way.

One of the biggest benefits to decentralized finance is that anyone can participate.  The challenge is that the bridge between the fiat and crypto worlds is still controlled by the establishment.  This means that FinCen still has the power to override anything that is taking place.

While the world of DeFi is still immature, it is aging rapidly.  Consider where we were at the beginning of the year with it.  Since that time, a lot of applications popped up which has attracted the billions that are presently there.  This is enhanced by the fact that the entire crypto space is expanding, with more tokens being issued on a daily basis.  Led by Bitcoin, some saw their value appreciate greatly in 2020.

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[Source](https://rwfxjps98l-flywheel.netdna-ssl.com/wp-content/uploads/2018/11/Alternative-data-1-1024x577.jpg)</center>

On Hive, there are more people posting about how they are growing their accounts.  This is something that is not just a few people here and there.  Each day we can find a post how someone attained a particular level with some token.  This is the mindset that is going to keep this industry forging ahead.

Cryptocurrency is shaping up to be its own wealth center.  Often I discuss this concept within the confines of a particular ecosystem, usually Hive.  However, if we step back. we see that the entire wealth spectrum will contain a piece that includes cryptocurrency.  If it were a pie chart, right now the size of the slice would be tiny.  Nevertheless, it is growing on a regular basis.

The present control agents are well aware of this.  It is not a great secret.  This means they are going to do all they can to maintain their relevance.  If not, they will be removed from the equation, something they cannot allow to happen.

Of course, the question is whether they can stop it or not?  The proposal to have any international transaction over $250 require AML tells me they are getting very desperate.  Entities that are not threatened tend not to make over the top decisions.  This proposal falls in that category in my opinion.

Just consider the power of Hive for a second.  I was chatting with someone from Nigeria yesterday about the rate of inflation there and how it is impossible for the average person to gain any financial success.  Holding money other than the national currency is not easy.  Thus, people are forced into a losing situation.

If we take a look at Hive, leaving all the other blockchains aside, consider how many currencies one could hold which is outside that nation's currency.  In addition to Hive, there are dozens of other tokens on Hive-Engine.  All have wallets that are controlled by the individual.  They also have 3 second transaction time and no fees associated with that.

Now think about this, for a second, as a remittance system.  Hundreds of billions of dollars are sent by people back to their native lands.  It is not uncommon for an individual to work in one country and remit money to family members back home.  Unfortunately, the rates on this type of transfer enter the loan shark realm.  Some pay near 20% just to remit the money internationally.

Cryptocurrency eliminates this.  One can send money from any Hive based wallet to another with no fee.  Of course, there is the issue of conversion to the native currency which is still a problem since, as mentioned, this is still controlled by the same entities.  However, we are making progress as this industry grows.

The financial establishment, led by the United States, is obsessed with control.  This is why it keeps pushing the KYC/AML at every opportunity.  In the end, it has little to do with illegal activities and more to keep them relevant.  

Our efforts in cryptocurrency are already forcing them into a desperate situation.  Not only do they have to contend with decentralized systems but the threat that an Amazon, Alibaba, or Samsung will suddenly announce their own currency.  This would seriously impact the activity that flows through the system they control.

Progress is being made and the reaction of certain institutions can be a guide to how much.  When they start making rash decisions, we can conclude that they are being affected.

The next couple years are really going to be interesting.

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