The Bank of England indicated the risks of the Defi sector

The Bank of England indicated the risks of the Defi sector

Decentralized protocols do not yet provide an effective way to manage risk. This was stated by Deputy Manager of England John Canliff.

“From the point of view of the financial stability and regulator authority, I’m not yet sure that inherent risks inherent in finances can be effectively managed in this way,” the official said.

He compared Defi Protokols with unmanned vehicles. In his opinion, the latter are “as good as good as the rules, programs and sensors that organize their work”. At the same time, Canliff doubted the degree of decentralization of projects:

“Behind these protocols are usually worth firms and interested parties that receive income from their activities. Moreover, it is often unclear who in practice controls the management of protocols “.

The official also pointed out the need to develop reliable consumer protection measures after FTX collapse. In his opinion, one of the catalysts of the crisis could be the Utility Token Bitcoin-Birzhi (FTT), which “did not have internal value” and “should not have been accepted as security for loans and marginal payments”.

Previously, Kanliff proposed to regulate cryptocurrencies by analogy with traditional finances.

Recall that in the summer of 2022, the Minister of Digital Technology, Culture, Media and Sports of Great Britain Chris Filp announced plans to turn the country into Cryptocenter.

Then the draft law on financial services and markets entered the parliament of the United Kingdom. The document is aimed at creating a regulatory framework for stablines and the fight against economic crimes.

At the end of October, the House of Commons supported the amendments to this bill. The proposed changes include digital assets in the sphere of regulated financial services.

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