“Overcollateralization in lending/borrowing means DeFI lending doesn’t expand the money supply (for the same cryptocurrency), which means, without centralization, it will be harder for DeFi to be seen as an alternative to the current fractional reserve banking approach,” the note said. Therefore, the bank expects DeFi to remain fairly small in the coming years.
Source: https://www.coindesk.com/business/2022/03/22/morgan-stanley-sees-defi-remaining-fairly-small-as-growth-to-slow/?utm_medium=referral&utm_source=rss&utm_campaign=headlines