Introduction to Centralized Finance

Daniel Liebau ()
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Daniel Liebau: ESSEC Business School, Lecturer

Chapter Chapter 7 in The Blockchain Scholars Book, 2025, pp 35-40 from Springer

Abstract: AbstractIn the context of blockchains, we refer to Centralized Finance (CeFi) as the financial systems that integrate distributed ledger technology while retaining centralized intermediaries, governance structures, and/or regulatory oversight. Unlike Decentralized Finance (DeFi), which operates on open and permissionless, peer-to-peer protocols on distributed ledgers, CeFi employs blockchain to enhance efficiency, transparency, or accessibility within traditional, intermediary-based operating models or simply enables cryptocurrency transactions amongst principals and agents. Hence, in CeFi, trusted entities such as banks, exchanges, or government institutions play a pivotal role in facilitating transactions, managing digital assets, and ensuring compliance to protect market participants from rogue actors.

Date: 2025
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DOI: 10.1007/978-981-95-2844-8_7

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