What is DeFi?
DeFi is a new way to deliver financial services through automated software protocols. These protocols currently offer several financial services that are analogous to traditional financial services (TradFi). While DeFi has the potential to improve efficiency in financial services, it remains at this point largely unregulated. As DeFi grows in size and the number of users, a lack of regulation could heighten risks to investors, financial institutions and the financial system.
While DeFi has the potential to improve efficiency in financial services, it remains at this point largely unregulated. As DeFi grows in size and the number of users, a lack of regulation could heighten risks to investors, financial institutions and the financial system.
Digital Regulation Tool
The FSRA has issued this discussion paper to foster dialogue amongst the DeFi community, including financial institutions, digital asset businesses and policy makers on how DeFi may be regulated.
It sets out the FSRA’s views on the likely medium-term direction of DeFi, high level policy positions that the FSRA is considering adopting, and an exploration of what a DeFi regulatory framework might look like.
As part of an ongoing commitment to engage a wide range of stakeholders, the DeFi discussion paper has been added to the FSRA’s digital regulations beta pilot. This will allow users to visualize and better grasp the concepts that link DeFi to TradFi and their implications for regulatory guidance.
Please get in touch with fintech@adgm.com if you would like to have access to the beta tool.
Do you have some recommendations?
We welcome your insights and feedback on this paper and the discussion points contained within.
Please click on the link below to access an editable proposals and submit your feedback to the team.