- “Shark Tank” star Kevin O’Leary has said DeFi will force financial middlemen to find new jobs – maybe shining shoes.
- The celebrity investor is backing decentralized finance and says it can change trading within three to four years.
- However, regulators are wary of DeFi, particularly after recent high-profile hacks and scams.
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“Shark Tank” star and crypto investor Kevin O’Leary has said financial middlemen should find jobs shining shoes, because decentralized finance technology will make their roles obsolete.
O’Leary has evolved into a crypto bull despite having criticized bitcoin in the past. He’s now increasingly keen on decentralized finance, or DeFi – the use of crypto technology to create financial products that do not need centralized authorities.
The entrepreneur told Insider last week that one reason he likes DeFi is because he’s tired of being “ripped off” by financial middlemen such as foreign-exchange brokers.
“This whole move into stablecoins and cryptocurrencies is to get rid of those middlemen. And we’re going to do it in the next three, four years,” O’Leary said. “They should find other jobs, maybe they should start shining shoes or something.”
‘Shark Tank’ star Kevin O’Leary breaks down why he’s ramping up his crypto allocation to 7% and investing heavily in DeFi – and explains why ether won’t be the dominant token in financial services
DeFi advocates say the technology can revolutionize finance by eliminating the need for intermediaries and central overseers, along with the fees they charge.
For example, O’Leary said he thinks DeFi will make financial deals like cross-border asset purchases much easier in the future, by allowing parties to trade using cryptocurrencies such as stablecoins instead of having to pay to convert currencies.
O’Leary – who made his money in the computer software business – is investing in a company called WonderFi, which is preparing to launch what it says will be a simple platform where people can trade assets and earn interest in the DeFi space.
However, regulators are increasingly concerned about DeFi. In June, Commodity Futures Trading Commission official Dan Berkovitz said he thinks much of the DeFi world is probably illegal, and argued that intermediaries are vital to financial stability.
Decentralized finance also sees its fair share of scams and hacks. Last week, hackers infiltrated DeFi platform Poly Network and stole more than $600 million, before returning much of the haul.
Yet the space is attracting interest from institutional investors and banks. The head of Societe Generale’s blockchain technology unit Forge told Insider in May that banks must adapt or risk becoming irrelevant, speaking after the French lender helped create a $121 million DeFi bond.
However, O’Leary said he thinks banks will wait for others to develop the technology and adapt to regulations before snapping up DeFi companies in a “massive consolidation.”