DeFi or decentralized finance can threaten the world of traditional banking, because of the shift in lending, even DeFi itself is known to be able to provide loans like other traditional banks.
This can affect existing traditional banks, because there will be competition between traditional banks and crypto in general, regardless of the various problems that will occur, crypto and traditional banks must be able to adapt to each other.
I will try to sort this out because a traditional bank is a place where everyone can save their money or assets with ease of monitoring it through an application that has been provided by the bank. This means that at this time Banks are still needed by everyone because Banks can only store the currency of their respective countries. And if someday Banks can cooperate with cryptocurrencies, I think it still needs some new things that must be changed by the Bank besides regulations from the state.
Crypto development is progressing so rapidly, this can be seen from the many users who join here, if Traditional Banks close themselves it is not impossible to be abandoned in the next few years.
Although currently crypto is still very risky, it is not impossible that in the future crypto can change finances, just need to wait for regulations or legal regulations, if this happens, it is certain that crypto will grow and be accepted by many people.
I don't deny the development of crypto at this time because there are many examples, but for now Banks are still needed to collaborate with crypto because you yourself may not be able to cash out the cryptocurrency you have if in your country you no longer have a bank at this time.