What is the Internet Financial System (IFS)?

The explosion of decentralized finance (DeFi) in recent years is well known in the blockchain sector. Being able to access a variety of financial services such as loans, loans, and savings without the supervision of a traditional financial institution is appealing to many, especially those in
less developed economies.

Having access to a financial system that is available 24 hours a day, 7 days a week and never closed for holidays is just one of the advantages of DeFi.

However, when we refer to DeFi, we often don’t include other online financial services that might be available, especially once central bank digital currencies (CBDCs) become more common. With that in mind, it seems best to create a more inclusive term: Internet Financial System (IFC

What is IFC?

The Internet Financial System, or IFC, is apparently what it seems, an alternative financial system on the Internet. The term was popularized by crypto venture capitalist Chris Burniske on Twitter. While its exact form has yet to be determined, it would generally comprise a more digital version of the traditional financial system, in combination
with DeFi.

The growth of Web3 and the creation of a more interactive Internet experience, including the growing desire to create digital identities for people and decentralized autonomous organizations (DAOs), means that changes will have to take place in the current system.

Why IFC is a better term than DeFi

The problem with the term DeFi is that it’s somewhat exclusive. No matter how much potential there is in blockchain and digital assets, not all people around the world will want to use digital assets like Bitcoin. However, they will want access to the same financial services that DeFi users can access

These services already exist in the form of traditional online banking services, but the reality is that there is a limited set of functionalities for those services. You can’t just take out a loan with a few clicks or lend money to someone else. Combining the advantages of DeFi, such as smart contracts, with the traditional financial services available would help a large part of the population to take
better financial control.

What could IFC be in the future?

The form of IFC in the future could have many forms. Assuming that many countries launch a CBDC using blockchain ledgers as their backbone, they could, if they wish, offer exactly the same services as DeFi. Bank customers could provide guarantees to a lending platform provided by the bank to take out a loan without having to go through traditional routes. DeFi could exist as its own separate sector that works with Web3 and the
crypto sector.

Depending on the willingness of governments to embrace digital assets in the long term, they could instead work with the developers of Web3 and DeFi services to create an all-encompassing IFC. This type of system would probably have a little more regulatory oversight than the current DeFi system, but it would make processes such as filing taxes related to the interaction of digital assets, among other things, much easier

What advantages would IFC have compared to traditional finance?

There are four main advantages that IFC would have over traditional finance. They are: speed of transaction/regulation, decentralization, accessibility and transparency. We’ll give a brief explanation of each one below.

Transaction/Settlement Speed

When using an IFC system, or even the current DeFi system, transactions and settlements would take much less time. In the current financial system, transactions such as a bank transfer, or a payment on something like a loan or credit card, are not even close to instantaneous. Part of the reason for this is the ‘hours’ in which the traditional financial system works.

Many transactions are processed only during bank hours, and it often takes days for these types of payments to be validated and applied to the relevant accounts. With an IFC system, these transactions would be almost instantaneous. You would be able to actually pay a credit card bill the day it’s due without taking two days to process and incurring


Taking control of the financial system out of the hands of a small number of parties and instead giving control to users is one of the principles of DeFi. As seen with what happened in the United States when some banks failed, you might not be able to take your money when you need it. You are also at the mercy of these same banks when you want to get a mortgage or loan. Creating a wider range of financial services options for people around the world would benefit many. Of course, this assumes that governments also create truly decentralized services or allow DeFi to continue operating


At present, if you want to open an account with a bank, take out a loan, a mortgage, or even just pay a bill, it can be difficult. This is especially true for those in less developed nations or outside urban centers. An IFC system would allow those who are not bankers to have a bank. You could take out a loan simply by adding collateral to a smart contract or allowing an AI financial app to access your financial background without having to talk to an advisor and provide them with all sorts of information. Instead, it would all be part of your online identity.


The final benefit of an IFC system would be its transparency. In the current financial system, anyone outside of those who work for the bank has no real idea what they are doing with customer funds. There’s no way to dig into a bank’s transaction history and assess what they’re doing for risk management purposes. With blockchain, everything is accessible. Ordinary people look at blockchain data and can make evaluations and assertions about what is happening. Perhaps if there were similar oversight available to banks, bankruptcies could be further avoided. In an IFC system this would (ideally) be possible

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