When people think about decentralized finance (DeFi), they usually think about the U.S., sometimes Singapore or maybe Dubai too. But if you zoom out just a little, you actually see something interesting happening in Europe’s emerging markets and a different kind of financial system evolving. And this is more than hype. The use, regulations, and innovation are all moving in the same direction.
A Market That’s Been Ignored
According to Chainalysis, Eastern Europe is already the fourth-largest crypto economy behind the U.S., Asia, and Western Europe, with nearly $499 billion in on-chain value. Notably, about 33% of that (over $165 billion) was powered by DeFi activity—and that shift has continued into 2025.
For regions such as Ukraine, Poland and Serbia, where traditional banking systems have gaps or trust, DeFi isn’t just an abstract concept. It’s a working substitute — a financial system built on technology that didn’t inherit structured legacy infrastructure.
Think about being able to access a small loan, send cross-border payments, or invest in tokenized assets without ever stepping inside a bank — that moment is more than just being a convenient banking substitute; this is ground-breaking in markets where banking penetration is often mixed or limited.
Why DeFi Resonates Here
But why are we seeing DeFi take off in emerging parts of Europe, sometimes quicker than even developed countries? A few reasons stick out:
Financial Inclusion Gaps
In parts of Central and Eastern Europe, millions are unbanked and face high barriers to credit access. DeFi apps only require an internet connection to bypass these challenges entirely.Economic Uncertainty
Currency instability in countries like Ukraine or Turkey has resulted in citizens becoming more open to alternatives. DeFi lending pools and stablecoins provide a hedge against systemic volatility.Tech-Forward Populations
Estonia and Poland already have substantial digital economies and a digitally native younger generation is undeniably curious about web3.Cross-Border Demand
Migrant workers send money back home but often pay fees of 7%–10% to conduct the transaction through traditional channels. DeFi significantly reduces these costs.
Regulatory Evolution: The Missing Piece of the Puzzle
Europe is feeling “on the cusp” right now primarily because of regulatory evolution. MiCA (Markets in Crypto-Assets Regulation) which has been fully operational since the end of 2024, provided clearer sets of rules around stablecoins, tokens issuance and how de fi can operate.
That might not sound that exciting, but it is a huge advantage for experimentation and development. The more that start-ups and even banks know the boundaries, the more they will explore all sorts of commercialization opportunities. MiCA creates three key changes for emerging EU economies:
- Investor Confidence: Users are far more likely to trust the platform to which they are entrusting their funds if it operates in a regulated framework (which the EU recognizes).
- Institutional Entry: Banks and legacy financial terms now have clearer partnership opportunities with legal backing to become DeFi service providers.
- Cross-Market Scaling: A lending app built in Poland is far more likely to scale in Croatia, or Hungary, without having to worry about 27 different legal systems.
The Untouched Growth Story
Despite this momentum, there is still vast untapped potential. Here's why:
- The vast majority of DeFi activity is happening in a handful of country locations such as Ukraine and Russia. There is significant potential to grow in other regions such as Romania, Bulgaria, and Croatia.
- Talent exceeds adoption. Central Europe is home to one of the fastest-growing developer pools on the planet; but when you compare our DeFi use-cases to the U.S. and Asia, they are still in their infancy.
- Trust is slow to build. While activity is increasing, skepticism surrounding security and scams is a hurdle to overcome.
In short, it means that the foundations are being laid but the real adoption curve is yet to come.
Use Cases That Might Reshape Finance
Rather than speculative offers, here are some concrete use cases for DeFi that may help address a particular challenge:
- SME Financing: In countries like Poland or Romania, there are small businesses that want to access loans through banks but struggle to get funded. DeFi lending pools, for example, might provide an alternative solution.
- Agriculture Finance: Farmers in Eastern European countries might potentially tokenize assets (such as future crop yields) as collateral to receive community-backed funding and access to external funding.
- Cross-Border Trade: Countries whose economies rely heavily on exports could use DeFi-enabled payment settlement systems to minimize delays and reduce reliance on centralized intermediaries.
- Remittances: Given that millions of Eastern Europeans work abroad, access to a low-cost DeFi payment option where money can be sent almost instantly may enable remittance payments to be made instead of using costly remittance companies.
A Measured but Positive Perspective
It's important to acknowledge certain challenges still exist: differing regulations among non-EU players, concerns around fraud, and the sheer complexity of DeFi platforms for the first time users.
However, here is what excites me about DeFi: the interplay of innovation, necessity, and regulation provide an ideal foundation for emerging European markets to become top-legacy markets for DeFi to grow. Unlike already saturated Western markets, DeFi has the opportunity to provide real, real-world solutions, for real people.
My Concluding Thoughts
DeFi in emerging European markets is still at its beginnings, but it is becoming harder to ignore all the indicators coming out of this region. Whether it's improving financial inclusion, or providing borderless trade, the possibilities are enormous and still relatively unexplored.
As someone who is closely following this ecosystem, I do not see DeFi here as "another cryptocurrency trend"; I see it as the bedrock for a new financial system that is more open and stable than before — one that could herald how the rest of Europe will develop over the next decade.
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