- Sid Powell claims "DeFi is dead" as a separate niche and will merge with traditional finance into a unified onchain market.
- Blockchains and stablecoins are set to become core settlement rails for global capital markets, from payments to securitized debt.
- Stablecoin transactions could reach $50 trillion by 2026, potentially surpassing major card networks and reshaping merchant economics.
- DeFi’s future scale may hinge on the market cap of stablecoins and tokenized assets, with the sector possibly reaching $1 trillion.
For Sid Powell, co-founder and CEO of Maple Finance, the catchy line “DeFi is dead” is less a doomsday warning and more a prediction of quiet integration. In his view, the industry is heading toward a world where decentralised finance is no longer treated as a separate ecosystem sitting on the fringes of traditional markets.
Instead, Powell argues that what people now call DeFi will simply melt into the financial plumbing underpinning the global economy. Over time, the distinction between DeFi and TradFi will fade, and users may not even notice they are interacting with blockchain rails when they move money, borrow, invest or trade.
From “DeFi vs TradFi” to a single onchain market
According to Powell, we are heading toward a scenario where, in just a few years, large institutions will stop drawing a clear line between onchain finance and the legacy system. In a conversation with CoinDesk, he suggested that capital markets activity will, step by step, migrate to public or permissioned blockchains as a default settlement layer, as exemplified by a tokenized money-market fund on Ethereum.
He likens this transition to the internet’s impact on retail. Before e-commerce, shopping meant going physically to stores, browsing shelves and paying at the till. Online platforms did not eliminate shopping; they simply moved a big chunk of that activity to websites and apps, where everything is handled through a few clicks and a digital checkout flow.
Blockchains, in Powell’s analogy, are playing a similar role in finance. Rather than reinventing money from scratch, onchain finance becomes the next technological layer for recording, clearing and settling financial transactions. In other words, it is less about replacing finance and more about replatforming it.
Just as consumers and businesses now rely heavily on Amazon, Alibaba and similar marketplaces, Powell expects financial services to be delivered primarily over blockchain-based infrastructures. Efficiency, speed, transparency and, in many cases, lower costs will be the main drivers of that shift, not ideological battles about decentralisation.
In this framework, traditional market participants gradually use crypto rails without necessarily marketing themselves as “DeFi projects.” From Powell’s perspective, the label “DeFi” becomes less important than the underlying mechanism: capital is issued, traded and settled onchain, regardless of how people describe it.
Onchain rails for capital markets: mortgages, cards and more
Looking ahead, Powell expects that crypto-native structures will extend far beyond trading tokens. He envisions bond-like instruments, securitisations and credit products all being issued and settled onchain. That includes markets such as mortgages and other forms of debt backed by real or digital assets.
One example he highlights is the idea of mortgages collateralised by bitcoin (BTC) or other crypto assets, bundled together into onchain securities and sold to investors. In parallel, credit card receivables and other payment flows could be tokenised, turned into tradable instruments and refinanced via blockchain-based markets.
In Powell’s scenario, these financial products are not purely experimental “DeFi yield farms.” Instead, they look very similar to familiar TradFi instruments, but with issuance, servicing and secondary trading all recorded on immutable ledgers. Smart contracts and token standards would handle what legacy systems currently process via a mix of databases, intermediaries and batch reconciliations.
Before such a model can scale, however, Powell acknowledges the need for a serious regulatory framework. Rules around investor protection, disclosure, risk management and compliance will have to catch up with the technology. That means regulators and lawmakers must clarify how tokenised securities, crypto-collateralised loans and stablecoins fit within existing regimes—or design new ones.
He expects the main users of this upgraded infrastructure to be institutional. Sovereign wealth funds, pension managers, insurers and large asset managers—what he calls the “managerial class” controlling global financial flows—could end up holding a significant amount of onchain paper. To them, the key selling points are efficiency, transparency and programmable settlement, not ideological commitments to decentralisation.
What “DeFi is dead” really means for the industry
When Powell declares that “DeFi is dead,” he is primarily referring to the idea of DeFi as a standalone, niche alternative to traditional markets. In his narrative, blockchain technology becomes so embedded in the financial stack that the average user no longer thinks in terms of “using DeFi” at all.
In that world, blockchain infrastructure is the dominant settlement layer, and people execute everyday transactions without consciously noticing that they are happening onchain. Just as most internet users do not need to understand HTTP or DNS, future financial users may not care whether their assets are tokenised or not, as long as the system works reliably.
This perspective shifts the focus from competition to convergence. Rather than DeFi and TradFi battling for supremacy, Powell sees traditional finance gradually becoming crypto-native. The old and the new stack fuse together, with banks, payment providers and asset managers adopting onchain instruments where they offer a clear economic benefit.
From this angle, the “death” of DeFi is more like a phase change in how the market is described. What began as an experimental sector, often framed as a parallel universe, slowly disappears into the broader infrastructure of global capital markets, powered by tokens, smart contracts and public ledgers.
The $50 trillion stablecoin argument
Powell bases part of his thesis on early but powerful signals already visible in the ecosystem, especially around stablecoins. After regulatory developments such as the GENIUS Act, major financial institutions have started to seriously explore or adopt stablecoins for payments and settlements.
Examples include PayPal, which has launched its own dollar-pegged PYUSD, and Société Générale, which has issued euro- and dollar-denominated stablecoins through its crypto unit. Another player, Fiserv, has introduced FIUSD for use across payment networks, while Wall Street giants like Bank of America, Citi and Wells Fargo have signalled that they are evaluating similar opportunities.
Although some of these efforts are still at a relatively early stage, card network titans Visa and Mastercard are also moving closer to the space. They are not issuing their own coins, but are building settlement and interoperability rails for stablecoin-based payments. Those rails could support multiple tokens and, in time, compete directly with bank-led digital money initiatives, including tokenised deposits.
This is where Powell’s most aggressive prediction comes in: he believes that, by 2026, stablecoins could be handling around $50 trillion in transactional volume, potentially overtaking the throughput of the largest card schemes. While forecasts of this scale come with obvious uncertainty, the direction of travel he describes is clear—onchain dollars and other fiat-backed tokens may become central to how value moves globally.
For merchants and small businesses in particular, Powell sees stablecoins as an underappreciated tool to improve margins. Retailers often operate on razor-thin profits, while paying 2% to 3% fees on card-based payments. If stablecoin-based settlement can replicate the user experience of card payments while lowering costs, that difference directly improves their bottom line.
Merchant incentives and the stablecoin business model
Under Powell’s view, the economic incentive for merchants to reduce payment fees is a powerful driver of adoption. Even shaving one or two percentage points off costs can be meaningful for businesses dealing with high volumes and intense competition. Stablecoins, settled over efficient blockchain networks, could in theory offer this kind of relief.
As acceptance grows among merchants, Powell expects that neobanks and, later, traditional banks will step in more aggressively, issuing and backing stablecoins themselves. That would take the market beyond a handful of crypto-native issuers and move it into a more regulated, institution-led environment, where stablecoins are integrated into existing banking services.
He also notes that major stablecoin issuers benefit from what looks a lot like an insurance-style “float” advantage. Users deposit fiat currency, which issuers then invest in safe, interest-bearing assets such as short-term U.S. Treasuries. While the tokens circulate onchain, issuers generally pay no interest to holders, meaning the yield on reserves effectively becomes their revenue.
Powell draws a comparison with companies like Berkshire Hathaway, whose insurance operations generate low- or negative-cost capital that can be deployed into investments. If stablecoin providers manage their risk carefully, the gap between what they earn on reserves and what they owe to token holders becomes a powerful engine for compounding returns over time.
This combination of merchant savings, bank-led issuance and the float-like revenue structure helps explain why Powell sees stablecoins as central to the next phase of financial infrastructure. Rather than being just a crypto side product, they could underpin payments, credit and capital markets at scale.
DeFi’s trillion-dollar potential and its dependence on tokenisation
The obvious question is what all this means for DeFi as it exists today. Powell’s answer is that DeFi could grow into a market worth up to $1 trillion in the coming years, even as the label itself becomes less prominent. Growth will not be linear, and the sector will remain sensitive to macroeconomic cycles, risk appetite and regulatory developments.
At present, the total DeFi market capitalisation sits around $69 billion, according to data from CoinMarketCap. That figure captures lending protocols, decentralised exchanges, liquid staking platforms and other onchain services. To reach the scales Powell describes, the space would need to ride broader trends, especially in stablecoins and real-world asset tokenisation.
In his view, the evolution of DeFi is tightly linked to how large the stablecoin market becomes and how many assets—both crypto-native and traditional—are issued in tokenised form. The total value locked in DeFi, he argues, is essentially a function of the combined market caps of stablecoins and tokenised instruments. As those foundations expand, the infrastructure sitting on top naturally has more to work with.
This points to a DeFi landscape that looks quite different from the early experimental years. Instead of a system dominated by speculative trading and yield strategies, onchain finance could tilt toward large-scale, institutional-grade markets: tokenised treasuries, securitised loans, collateralised credit, stablecoin-based payments and automated liquidity facilities.
At the same time, the sector remains cyclical. Interest rate shifts, liquidity conditions and shifts in risk sentiment can all slow or accelerate adoption. Powell’s thesis does not assume a straight line upward but rather a structural trend in which more and more financial activity quietly moves onchain, even if prices and volumes fluctuate along the way.
Ultimately, Powell’s “DeFi is dead” remark describes a future where the technology that once defined a niche sector becomes the invisible backbone of mainstream finance. The labels may fade, but if his forecast plays out, the bulk of capital markets, from payments to debt issuance, could be settled over blockchain rails—leaving DeFi not so much dead as fully absorbed into the core of the global financial system.
