Fed Governor Waller: Smart contracts, DLT and other technologies still cannot fully achieve financial decentralization

Fed Governor Waller expressed his views on decentralized finance at the Vienna Macroeconomics Seminar held by the Vienna Institute for Advanced Studies in Austria. He said that distributed ledger technology (DLT) may be an efficient and fast way to record in a 24/7 trading world; instead of relying on the parties to execute transactions separately, smart contracts can effectively merge multiple links of transactions into a unified behavior executed by smart contracts. However, DLT, tokenization, and smart contracts are just transaction technologies that can be used for DeFi or to improve the efficiency of centralized finance. These technologies will almost certainly improve efficiency over time. Can the use of these technologies really achieve complete financial decentralization? The answer is obviously no. Intermediaries are still valuable to ordinary people, as can be seen from the existence of trading exchanges in the crypto world. All of these platforms involve entrusting an individual's crypto assets to an intermediary, who trades on behalf of the client, which again raises the need for trust in these platforms, just as the modern banking system requires trust.