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.
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.
Well, as long as the government never cooperate and always see crypto as a competitor to fiat, traditional banks will never allow to accept crypto or integrate crypto into their transactions. However, if crypto will be legally adopted and accepted in the future, traditional banks will never stop their operation but they will continue to serve their customers and assist them in which type of payment they are convenient to make, be it crypto or in fiat.
This is more rational, traditional and crypto banks must be able to run simultaneously, in fact this can keep the bank in accordance with its function, the development of the times cannot be covered by something with existing rules, so that new existing programs (DeFi) will grow by itself, but if the two can coexist and have clear rules and regulations, then there will never be one of them will be left out
Both would co-exist with each other but there's no way that traditional banks would be adopting or integrating or cooperating with crypto even if they do tend to plan with such thing but we know that
crypto is decentralized in most projects that is existing.There's no way that they could really be having that full control which simply implies that it would really be totally opposing their overall
preference in terms of centralization thats why its not surprising that they do really always made out some counter move towards crypto if they do have the chance.
So dont expect that everything would goes well in between the two.
It is only necessary to apply the right regulations, so that traditional bank functions can continue to function as they function, while crypto (DeFi) is still given a limit, so that they do not surpass traditional banks, but if this continues to be opposed, then what is feared is that they will be better than banks. and in the end it was the bank that was abandoned by many people, it is not impossible that this will happen, the development of the times can happen things that are beyond people's predictions