Fidelity: Fed Rate Cuts May Benefit DeFi and Stablecoins.

Ritu13

On January 15, according to Cointelegraph, Fidelity has stated that the anticipated rate cuts by the Federal Reserve may rekindle the interest of major institutions in decentralized finance (DeFi) and stablecoins, provided that the infrastructure sees further development this year.

In Fidelity's 2024 Digital Asset Outlook report released on January 13, it is mentioned that despite expectations last year that institutions would enter the DeFi space for its yields, the shift towards "perceived safer" traditional fixed-income products occurred due to the Federal Reserve's interest rate hikes. The report states, "In the current risk-off environment, institutions consider the mid-single-digit returns provided by DeFi less attractive given the associated risks of experimenting with smart contracts."

The report suggests that if DeFi yields "become more attractive than traditional finance (TradFi) yields again, and more mature infrastructure emerges," institutions may develop "new interest" in DeFi in 2024.

Iravan774

With the U.S. cutting interest rates, everything seems to be on the rise.

977Iti

I wonder if there will be further interest rate cuts in the end.

Kahn332

It's best for stablecoins if they prove to be beneficial.

Kalkin995

However, there might be times when interest rates are increased.