As global markets grapple with the resurgence of protectionist policies, Vlad Kamyshov, CEO of EVAA Protocol, voiced concerns in a note to crypto.news over the effects of tariffs on digital finance ecosystems.
“Import taxes tend to raise consumer prices, feeding inflationary pressure,” Kamyshov wrote to crypto.news. “In response, central banks—especially the Federal Reserve—may choose to hike interest rates or delay anticipated cuts.”
The Federal Reserve faces divergent views internally—some policymakers urge holding interest rates steady or making gradual cuts, while others warn that rising short-term inflation expectations may necessitate higher rates.
Kamyshov emphasizes the strain on digital assets:
“Higher rates and a stronger dollar typically reduce liquidity, making it more expensive to access capital. In such conditions, risk-on assets like cryptocurrencies and DeFi tokens often see outflows as investors rotate into safer havens like bonds or gold.” – Vlad Kamyshov
Stablecoins,which are central to DeFi operations, are not immune.
“As the dollar strengthens—and the DXY rises on expectations of Fed tightening—USD-pegged stablecoins like USDC, USDT, and DAI face indirect pressure…for international users, a stronger dollar makes on-chain dollars more expensive to acquire and hold.” – Vlad Kamyshov
The ripple effects extend to DeFi platforms. “Protocols like Uniswap, Aave, and Compound see reduced activity and TVLs when these digital assets become harder to access or less attractive to hold,” he observes.
Kamyshov also believes that ower stablecoin inflows can lead to thinner liquidity, wider spreads, and less efficient trading processes.
Protection against control
Amid these challenges, Kamyshov perceives a potential shift in the landscape. With increasing state intervention and the strain on traditional systems, decentralized finance may once again become attractive as a means of protection against centralization.
Innovations that lessen reliance on the dollar, enhance capital efficiency, or provide alternative stablecoin solutions might find significant opportunities for growth, Kamyshov argues.
However, he cautions, “The big question is whether DeFi protocols can adapt quickly enough to a macro environment defined by inflation, protectionism, and regulatory unpredictability.”
