DeFi Education Fund Proposes Tech to Cut Poverty Costs

DeFi Education Fund Aims to Combat Poverty by Reducing Costs

The DeFi Education Fund, an advocacy organization focused on decentralized finance (DeFi), has proposed leveraging technology to reduce costs, aiming to address poverty in the United States and globally. In a recent blog post, the group stated that DeFi infrastructure could potentially save unbanked and underbanked individuals worldwide approximately $30 billion annually by reducing remittance costs.

The organization cited the example of workers sending money home and incurring fees, which could be reduced “by up to 80%” through DeFi solutions. The DeFi Education Fund further elaborated, stating: “The poverty premium [the expenses incurred by low-income households that wealthier individuals are often able to access at a lower cost] persists because the current, layered, antiquated financial infrastructure makes it expensive to profitably serve low-income customers.”

The fund emphasized: “Nothing is free, and DeFi doesn’t eliminate costs entirely, but by removing intermediaries and leveraging software rather than outdated financial systems, we can dramatically reduce the cost of financial services for everyday people and give them greater control of their finances.”

Numerous advocates have suggested employing various blockchain technology applications to tackle factors contributing to poverty, such as decreasing transaction times, eliminating or reducing fees, and improving access to financial services. The DeFi Education Fund highlighted the rising costs in the US associated with cashing paychecks without a bank account, using money orders, and owning a home.

Growing Interest in DeFi Features

“While only 3% of Americans are very familiar with DeFi currently, there is substantial openness to its core proposition,” the fund stated. “A majority of American adults find DeFi features appealing: 56% value having full personal control over their money at all times, 54% want full personal control over the security of their personal and financial data, and 53% want to see their full financial history at all times.”

Seeking Policies and Laws Favorable to DeFi

In the US, lawmakers in Congress are moving closer to considering comprehensive digital asset market structure legislation. While Republicans on both the Senate Agriculture Committee and Senate Banking Committee have released their respective discussion drafts for the legislation, questions remain about the final form the bill will take following bipartisan discussions.

In October, several Senate Democrats on the banking committee reportedly pushed back against the Republicans’ draft bill concerning DeFi. These lawmakers submitted a proposal that could restrict DeFi protocols under certain circumstances.

The market structure bill, previously delayed by a 43-day government shutdown that concluded recently, is reportedly progressing. Senate Banking Chair Tim Scott has indicated that he anticipates the bill will be signed into law by early 2026.