Analysts argue that decentralized finance (DeFi) may become a tool for reducing poverty in the U.S., allowing low-income households to save around $30 billion annually by significantly lowering the cost of basic financial services.
Experts at the DeFi Education Fund (DEF) published a study claiming that decentralized financial infrastructure can help people without bank accounts, or those living in areas with limited access to banking services, cut up to 80% of their money-transfer expenses.
According to DEF, 5.6 million U.S. households are unbanked, and another 14.2% of households, despite having bank accounts, prefer using alternative financial services.
Another DEF study shows that interest in alternative financial infrastructure in the U.S. is growing as dissatisfaction with the traditional banking system rises. 77% of Americans consider bank fees excessive, while 71% don’t believe traditional finance can protect their money or data. More than half of Americans want to send money without intermediaries.
Low-income families spend an average of 7.1% of their annual income on financial service fees — about $1,750 per year. In comparison, affluent Americans spend roughly $400 annually on financial operations, which is just 0.2% of their yearly income.
Analysts also note that U.S. residents relying on checks spend over $1,000 extra per year, since check-cashing fees range from 1% to 5%. Meanwhile, postal money-transfer fees have risen 45% over the past decade.
According to DEF, all these factors make everyday financial operations so expensive that they keep millions of U.S. families trapped in poverty. However, DeFi infrastructure could change this dynamic. Decentralized financial tools eliminate intermediaries, reduce costs, and allow users to control their funds directly. DEF estimates that the use of DeFi solutions could save around $30 billion per year for low-income and unbanked households. For an individual worker sending $500 each month, this amounts to over $300 in annual savings — amounts that make a real difference at the household level and help reduce debt burdens.
Analysts emphasize that the long-lasting lack of reform in the traditional financial system worsens poverty, as serving low-income groups is costly, and the system transferred these expenses onto those least able to afford them. The DeFi ecosystem, in contrast, offers a technological alternative that can ease the financial burden for the 42.8 million Americans living below the poverty line and give them access to modern, lower-cost financial services.
DEF’s research also shows that only 3% of U.S. adults are well acquainted with decentralized finance. They found that the most appealing DeFi features are:
- full personal control over one’s money at any time (56%);
- security of personal and financial data (54%);
- access to complete financial history at any moment (53%).
Analysts urge the government to consider the specifics of the DeFi ecosystem when developing regulatory rules for digital assets. Understanding the functionality, assessing the benefits, and providing regulatory clarity could form the basis for a fairer financial system capable of meaningfully reducing poverty in the U.S.
In the U.S., members of Gen X and Gen Z are disappointed with the traditional financial system. One in five Americans aged 27 to 42 is a crypto investor and views digital assets as an alternative for retirement savings.
