Fed Governor Warrell: Technologies such as Smart Contracts and DLT still cannot fully achieve financial Decentralization

At the Vienna Macroeconomics Symposium held by the Austrian Institute of Higher Studies, Federal Reserve Board member Warrell expressed his views on Decentralization finance, stating that Distributed Ledger Technology (DLT) may be an efficient and fast way of recording transactions in the 24/7 trading world; Smart Contracts can effectively consolidate multiple links of a transaction into a unified behavior executed by Smart Contracts, without relying on individual execution by each party. However, DLT, tokenization, and Smart Contracts are just transaction technologies that can be used for Decentralized Finance or to improve CeFi efficiency. Over time, these technologies will almost certainly improve efficiency, but can these technologies truly achieve complete financial Decentralization? The answer is obviously no. Intermediaries are still valuable to ordinary people, as evidenced by the existence of exchanges in the encryption world. All of these platforms involve entrusting individuals’ encryption assets to intermediaries, who then trade on behalf of clients. This once again raises the need for trust in these platforms, just like the modern banking system requires trust.