Centralized Financial Structure

Definition ∞ A centralized financial structure is a financial system where a single entity or a limited group of entities controls critical functions. This structure typically involves intermediaries like banks and financial institutions that manage transactions and maintain ledgers. Decisions and oversight originate from a central authority.
Context ∞ The concept of a centralized financial structure stands in direct contrast to decentralized finance (DeFi) within the digital asset space. News often compares the efficiency and control of centralized systems against the transparency and autonomy offered by blockchain technology. Debates continue regarding the optimal balance between centralized regulation and decentralized innovation for market integrity.