Financial Disintermediation
The shift of funds from banks to alternative channels, potentially reducing bank lending.
What is Financial Disintermediation?
In CBDCs, disintermediation risks arise if retail versions attract deposits, contracting bank credit by 5-10% in high-risk scenarios. Two-tier models like e-CNY mitigate this by limiting holdings to RMB 500,000.
For digital assets, DeFi platforms cause “slow” shifts, but crises trigger “fast” runs, impacting stability. IMF models show low liquidity risks increase lending if managed.
Related Terms
MEV
The maximum profit validators can extract from Ethereum block production by reordering, including, or excluding transactions, beyond base rewards and gas fees.
DeFi
Decentralized Finance (DeFi) refers to financial applications built on a blockchain that operate without centralized intermediaries, using smart contracts to enable trustless lending, borrowing, trading, and more.
Commodity-pegged Stablecoin
A digital asset tied to the value of physical commodities like gold or silver.
DefiLlama
A free, transparent DeFi analytics platform aggregating total value locked (TVL) and metrics across blockchains.
Financial Disintermediation
The shift of funds from banks to alternative channels, potentially reducing bank lending.
Collateral
Digital assets deposited by borrowers to secure loans in DeFi lending protocols.