The Heads of the ECB and the Federal Reserve has called for the enhance the regulation of the Defi sector

The Heads of the ECB and the Federal Reserve has called for the enhance the regulation of the Defi sector

The chairmen of the leading Central Bank during the online statement organized by the Bank of France called the strengthening of the regulation of the decentralized finance sector (Defi) amid its development.

The head of the Fed, Jerome Powell, announced the availability of structural problems in the Defi-transist. In his opinion, one of them is the lack of transparency.

“The good news, I believe, is that from the point of view of financial stability, the interaction between the Defi ecosystem and the traditional banking system is currently not so great,” said the chairman of the Fed.

However, Powell warned that such a situation “would not persist endlessly”. He pointed out the presence of a “real need for more suitable regulation” as the decentralized finance sector expands.

In the speech of the chairman of the Federal Reserve, a parallel was traced with the recent conclusions of the researchers of the department. In their opinion, the lack of a clear regulatory framework threatens long-term risks for financial stability by Defi.

In turn, the manager of MAS Ravi Menon pointed out the importance of distinguishing between various components of the crypto -ecosystem and types of risks and advantages that each of them represents.

“If you look, for example, at tokenized assets, many banks are experimenting with them. They represent less risk, but are not a predominant part of the ecosystem, although this is the real potential, ”Menon said.

According to him, the biggest problem of the Defi sector is the difficulty using regulation. However, overcoming this problem opens up the “some prospects” of the segment, added Menon.

President of the European Central Bank Christine Lagarda recalled Terra’s collapse. In her opinion, this case “justifies” the tightening of regulation.

“If we do not participate in this game, if we do not participate in experiments, innovations from the point of view of digital money of the Central Bank, we risk losing the role of the anchor that have played for many, many decades,” she said.

The head of BIS Agustin Karstens also made a hint of an incident with Terra. He noted the role of stablecoins in Defi and indicated that their provision is “often ineffective”. The official suggested that the sector has “structural problems and internal weaknesses”.

“Defi applications simplify borrowing, lending and trading, but intermediaries are also subject to traditional risks, such as liquidity, the risks of the counterparty and the risk of the credit shoulder, and Defi does not have infrastructure to solve this,” Karstens added.

The European Commissioner for Financial Stability, Financial Services and the Union of Capital Market Market McGinnsa indicated the potential of blockchain technology, which excludes intermediaries and eliminates the need for centralized processes.

However, she agreed with colleagues that without regulation of cryptocurrency pose a threat.

“This new ecosystem [Defi] carries both opportunities and risks for firms, the financial system and society as a whole, so we need to take them into account if we want to benefit from opportunities,” added Mcginnesses.

Earlier, the EU authorities agreed on the bill on the regulation of Mica cryptocurrencies . He describes the rules that apply to the issuers of unsecured crypto assets, “stable coins”, trade and caste -casual platforms.

CEO BINANCE Chanpeng Zhao called the document “fantastic”, but “a little strict” regarding stablecoins.

Recall that September 16, US authorities presented the concept of regulation of the cryptocurrency industry. It involves many initiatives, including the tightening of law enforcement practice regarding suppliers related to digital assets of services.

Bloomberg later learned about the development of a bill to regulate “stable coins”. In particular, he will introduce a two -year ban on new algorithmic steablecoins like Terrausd.

The head of the Bitcoin-Torge Coinbase Brian Armstrong criticized the approach of the United States to regulatory crypto industry. In his opinion, the tough position of the authorities restrains the development of the industry and forces projects to leave the country.

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