DeFi Advocates Propose $30 Billion Annual Savings Plan to Combat Global Poverty
Decentralized finance (DeFi) advocates and allied policy groups have proposed a comprehensive plan suggesting that DeFi technology could save up to $30 billion annually by eliminating intermediaries and addressing what is termed the "poverty premium." This premium results from fees imposed on low-income populations who have limited access to traditional banking.
Global poverty statistics referenced include projections for 2025 with 808 million people living in extreme poverty on less than $3 a day, and 887 million experiencing multidimensional poverty. In the United States, 5.6 million people remain unbanked while 14.2% are underbanked. Low-income households often pay up to 5% to cash a paycheck and spend 7.1% of their annual income on fees, compared to just 0.2% for wealthier households.
The DeFi Education Foundation (DEF) highlights that removing intermediaries through DeFi infrastructures could reduce remittance costs by up to 80%, translating into an estimated $30 billion in annual savings for unbanked populations worldwide. An Ipsos-DEF survey indicated that 42% of Americans might try DeFi if privacy protections were emphasized, with 56% desiring full control over their money and 54% wanting control over their financial data.
Advocacy efforts have escalated in Washington, D.C., with DEF launching the DeFi Education Foundation in August 2025. The foundation has urged the U.S. Securities and Exchange Commission (SEC) to establish a regulatory "safe harbor" for blockchain applications. DEF also submitted a response to the Senate Banking Committee’s draft Responsible Financial Innovation Act of 2025, advocating for clear regulatory delineations.
Key participants in these initiatives include prominent crypto firms such as Paradigm, Jump Crypto, Multicoin Capital, the Solana Policy Institute, and the Uniswap Foundation.
While DeFi shows promise, its practical applications face limitations including collateral-heavy lending requirements, asset volatility, smart contract vulnerabilities, and barriers related to financial literacy. Current DeFi activity remains heavily skewed toward speculative investment. For instance, El Salvador’s 2021 adoption of Bitcoin as legal tender has not yet resulted in the expected increase in daily usage.
Geographically, crypto networks in regions such as Nigeria and East Africa enable transactional capabilities both with and without smartphones. Additionally, in countries like Venezuela, Zimbabwe, and Argentina, cryptocurrencies serve as tools for money transfers and preserving savings. Some humanitarian organizations have also adopted blockchain technology to ensure transparent distribution of aid.
