Michael R426 Morris#10

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What is decentralized forex (DeFi FX) and how does it differ from traditional markets?

Decentralized forex (DeFi FX) uses blockchain-based protocols to trade currencies without centralized intermediaries. Instead of brokers, smart contracts facilitate swaps between tokenized fiat or stablecoins. Benefits: transparency, reduced counterparty risk, and access for unbanked populations. Risks: liquidity fragmentation, smart contract vulnerabilities, and regulatory uncertainty. Institutions cautiously experiment with DeFi FX, while retail participation grows through platforms offering tokenized USD/EUR or synthetic FX pairs. Unlike centralized forex, DeFi FX operates 24/7, bridging crypto with fiat trading. Its long-term potential lies in democratizing access, though it faces hurdles in adoption and trust compared to established OTC markets.