Bitcoin
BTC$29 106.25

-2.42%

Ethereum
ETH$1 948.76

-4.39%

Tether
USDT$0.998927

0.01%

USD Coin
USDC$1.000000

-0.02%

Binance Coin
BNB$295.00

-1.85%

XRP
XRP$0.409415

-4.38%

DeFi needs regulatory clarity to interface with real-world finance


07 Apr 2021

#DFI.Money

Decentralized finance protocols and regulatory agencies need to figure out DeFi regulations to enable the niche crypto market to integrate with real-world finance. Rune Christensen, founder and CEO of DeFi bluechip MakerDAO, says the decentralized finance space is set to move from its current isolated bubble phase toward more integration with the broader financial landscape. Christensen made this known during Tuesday’s plenary session “Behind the Decentralized Finance Hype” at the ongoing Global Technology Governance Summit organized by the World Economic Forum.

According to the MakerDAO CEO, DeFi protocols interacting with real-world assets, such as commercial real estate and trade financing, will require significant regulatory input, stating:

“The huge difference between the primordial soup of DeFi building and DeFi in the real world is that now you have to engage with regulation and laws.”

Indeed, the dematerialization of securities is an already existing example of the emerging asset tokenization trend. Countries like Germany and Switzerland have already created legal frameworks that allow tokenized securities to fall under the same regulatory compliance requirements as traditional investment instruments. With regulatory agencies in the mix, Christensen acknowledged that DeFi’s entry into real-world financing might proceed significantly slower than the march of progress that took the niche market segment to a $100-billion valuation.

For Aušrinė Armonaitė, Lithuania’s minister of the economy and innovation, regulatory agencies need to adopt a “teach more, punish less” approach to dealing with frontier financial technologies like DeFi. 

Speaking during the session, Armonaitė stated that regulators and government agencies should be alive to the uniqueness of the DeFi space even beyond fintech. According to the Lithuanian minister, regulatory bodies need to engage in constructive dialogue with DeFi stakeholders to achieve middle-ground regulatory provisions that ensure investor protection while not stifling financial innovation.

DeFi regulations are increasingly becoming a topic of conversation among many stakeholders, with regulatory agencies reportedly looking toward policing the growing ecosystem.

Back in March, the Financial Action Task Force published an updated version of its draft guidelines for cryptos with significant implications for the DeFi space. The document likely signals the growing intent among regulators to implement Know Your Customer compliance protocols for DeFi platforms.


Related

DeFi adoption on the Binance Smart Chain reaches new highs
DeFi adoption on the Binance Smart Chain reaches new highs
Developer-focused DeFi aggregator Instadapp launches governance token
Developer-focused DeFi aggregator Instadapp launches governance token
Why DeFi could rebuild trust in financial services
Why DeFi could rebuild trust in financial services
Next Step for Institutional DeFi? Institutional NFTs
Next Step for Institutional DeFi? Institutional NFTs
Top 3 DeFi lending protocols exceed $20B in deposits
Top 3 DeFi lending protocols exceed $20B in deposits
DeFi boom drives 1200% increase in DApp volume in 2020
DeFi boom drives 1200% increase in DApp volume in 2020
How does DeFi reach mass adoption?
How does DeFi reach mass adoption?
DeFi is here to stay despite signs of a bubble
DeFi is here to stay despite signs of a bubble
BlingSwap: DeFi is quickly growing up
BlingSwap: DeFi is quickly growing up

Top Cryptocurrencies with Price Predictions

# Crypto Prediction Accuracy CVIX Price 24h 7d Market Cap 7d price change
1 Bitcoin (BTC) BTC Bitcoin predictions 60.8% 82 $29 106.25 -2.42% 5.31% $554 291 732 800 BTC 7 days price change
2 Ethereum (ETH) ETH Ethereum predictions 64% 82 $1 948.76 -4.39% 2.87% $235 479 609 902 ETH 7 days price change
3 Tether (USDT) USDT Tether predictions 92.8% 1 $0.998927 0.01% 0.45% $74 133 574 134 USDT 7 days price change
4 USD Coin (USDC) USDC USD Coin predictions 95.6% 1 $1.000000 -0.02% -0.02% $52 342 870 112 USDC 7 days price change
5 Binance Coin (BNB) BNB Binance Coin predictions 63.2% 83 $295.00 -1.85% 22.08% $48 166 486 706 BNB 7 days price change
6 XRP (XRP) XRP XRP predictions 68% 71 $0.409415 -4.38% 13.13% $19 792 398 575 XRP 7 days price change
7 Binance USD (BUSD) BUSD Binance USD predictions 93.6% 1 $0.999245 -0.27% -0.42% $18 398 603 846 BUSD 7 days price change
8 Cardano (ADA) ADA Cardano predictions 64% 77 $0.514791 -8.42% 17.73% $17 375 510 992 ADA 7 days price change
9 Solana (SOL) SOL Solana predictions 58.4% 84 $50.79 -8.30% 15.69% $17 139 777 776 SOL 7 days price change
10 Dogecoin (DOGE) DOGE Dogecoin predictions 61.2% 87 $0.084252 -5.17% 11.85% $11 177 788 099 DOGE 7 days price change
11 Polkadot (DOT) DOT Polkadot predictions 62.8% 78 $9.61 -8.87% 19.27% $9 486 356 576 DOT 7 days price change
12 Wrapped Bitcoin (WBTC) WBTC Wrapped Bitcoin predictions 59.6% 82 $29 092.16 -2.40% 5.58% $8 144 434 333 WBTC 7 days price change
13 Avalanche (AVAX) AVAX Avalanche predictions 58.8% 82 $29.59 -11.64% 6.16% $7 963 113 848 AVAX 7 days price change
14 TRON (TRX) TRX TRON predictions 73.6% 55 $0.071826 -0.02% -1.60% $7 007 431 948 TRX 7 days price change
15 Dai (DAI) DAI Dai predictions 95.2% 1 $1.000124 0.04% 0% $6 501 256 168 DAI 7 days price change

Be the first to receive Cryptocurrency Price Predictions and Forecasts daily

Get cryptocurrency price predictions, forecasts with analysis and news right to your inbox.

© 2015-2022 Crypto-Rating.com

The usage of this website constitutes acceptance of the following legal information. Any contracts of financial instruments offered to conclude bear high risks and may result in the full loss of the deposited funds. Prior to making transactions one should get acquainted with the risks to which they relate. All the information featured on the website, including information about the cryptocurrencies and bitcoin is intended solely for informational purposes, is not a means of advertising them, and doesn't imply direct instructions for investing. Crypto Rating shall not be liable for any loss, including unlimited loss of funds, which may arise directly or indirectly from the usage of this information. The editorial staff of the website does not bear any responsibility whatsoever for the content of the comments or reviews made by the site users about cryptocurrencies. The entire responsibility for the contents rests with the authors. Reprint of the materials is available only with the permission of the editorial staff.