A coalition of decentralized finance proponents is championing a new initiative aimed at easing the financial strain on low-income households worldwide. Led by the DeFi Education Fund (DEF), the proposal argues that Decentralized Finance (DeFi) technology can challenge the high fees of traditional intermediaries, potentially redirecting an estimated $30 billion annually from institutional profits into the pockets of those who need it most.

The High Cost of Financial Exclusion

The push for financial alternatives comes as global poverty remains a persistent challenge. According to updated global estimates, 808 million people are projected to be living in extreme poverty on less than $3 a day by 2025, with another 887 million considered to be in multidimensional poverty. For these households, the existing financial system often makes a difficult situation worse by imposing what researchers call a “poverty premium.”

In the United States alone, approximately 5.6 million households are unbanked, and another 14.2% are underbanked, forcing them to rely on costly alternatives. Cashing a paycheck can cost up to 5% of its value, and various fees consume an average of 7.1% of annual income for low-income families—a stark contrast to the 0.2% paid by wealthier households. The DEF argues that these accumulated costs are a significant barrier to economic stability.

A Decentralized Solution to Costly Intermediaries

The core of the proposal lies in using DeFi’s infrastructure to eliminate intermediaries for basic financial services like remittances, money transfers, and bill payments. One key estimate suggests that DeFi could cut global remittance costs by as much as 80%. This reduction alone could save the world’s unbanked populations $30 billion per year.

Public sentiment appears to be shifting toward such alternatives. A survey conducted by DEF and Ipsos revealed that 42% of Americans would likely try DeFi services if new legislation clarified crypto privacy protections. Frustrations with banking delays, unexpected fees, and lack of access to funds were common complaints. The survey also found that 56% of adults want full control over their money, and 54% want control over their financial data.

Advocacy Efforts in Washington

Alongside its economic arguments, the DeFi Education Fund has intensified its policy efforts. In August, the organization launched the DeFi Education Foundation, a nonprofit created to expand its advocacy and engagement with lawmakers. In a joint effort with Andreessen Horowitz (a16z), the DEF also urged the U.S. Securities and Exchange Commission to establish a regulatory “safe harbor” for blockchain applications. They argued that neutral software interfaces shouldn’t be classified as brokers, a move they believe would foster innovation.

Furthermore, the DEF and other major crypto firms, including Paradigm, Jump Crypto, and the Uniswap Foundation, submitted a formal response to the Senate Banking Committee’s draft Responsible Financial Innovation Act of 2025. Their filing called for a clear regulatory distinction between software developers and financial intermediaries.

Real-World Use Cases and Lingering Hurdles

Advocates point to existing examples of how digital tools are expanding financial access. In Nigeria and parts of East Africa, crypto-based networks enable transactions with or without smartphones. In countries facing hyperinflation like Venezuela and Argentina, digital currencies have become a tool for moving money and preserving savings. Some humanitarian groups have even adopted blockchain systems to distribute aid with greater transparency.

However, DeFi is not without its limitations. Researchers note that collateral-heavy lending models, volatile token markets, and smart contract vulnerabilities have slowed wider adoption. Financial literacy also remains a significant barrier. Much of today’s DeFi activity is still concentrated in speculative trading rather than real-world economic use. Even in El Salvador, where Bitcoin became legal tender in 2021, daily usage has fallen short of expectations.

Despite these challenges, the DEF maintains that policymakers should focus on protecting the aspects of DeFi that directly reduce costs for consumers. The group insists that open access, low-cost settlement, and user control are essential components for reaching people living on the financial margins.