Fidelity: Fed rate cuts may benefit DeFi and stablecoins.

According to BlockBeats news on January 15th, Fidelity expressed that the expected rate cut by the Federal Reserve may rekindle major institutions' interest in decentralized finance (DeFi) and stablecoins, provided that the infrastructure continues to develop further this year, as reported by Cointelegraph. Fidelity's 2024 digital asset outlook report, released on January 13th, stated that although institutions were expected to enter DeFi for returns last year, they ultimately did not due to the Fed's interest rate hike, which pushed them towards "perceived safer" traditional fixed income products. "In the current risk-off environment, institutions view the mid-single-digit returns offered by DeFi as too low for the associated risks of experimenting with smart contracts," the report said. The report suggests that if DeFi returns become "more attractive than traditional finance (TradFi) returns again, and more developed infrastructure emerges," institutions may develop "new interest" in DeFi by 2024.