Insight - Boom or bust?

New asset class: A technician monitors cryptocurrency mining rigs in Canada. Major banks are looking at how such technology can be used to complement, rather than upend, established finance. — Bloomberg

IT sounds like a surefire bet. You lend money to a borrower who puts up collateral that exceeds the size of the loan, and then you earn interest of about 20%. What could possibly go wrong?

That’s the proposition presented by “DeFi”, or decentralised finance, peer-to-peer cryptocurrency platforms that allow lenders and borrowers to transact without the traditional gatekeepers of loans: banks.