Usually CEX use fiat. But it is not safety to hold money on CEX. CEX can be hacked and CEX can block the account of users.
Now many CEXs blocks the accounts of traders from Russia.
Many people are afraid of sanctions. Nobody wants that his account will be blocked.
That is why people prefer to use DeFi.
Also many people do not have access to bank services.
People need to be sure that no one will be able to block their assets or steal money from their account, which is why many people prefer DEX.
But DEX also must be safety and have a good liquidity.