Fed calls the growth of the DeFi market a threat to financial stability
The main risk lies in the lack of proper regulation of the industry, according to analysts of the regulator
05.09.2022 - 08:05
221
1 min
0
What’s new? The growth of the capitalization of the decentralized finance (DeFi) market could potentially pose threats and long-term risks to financial stability. That is the conclusion reached by analysts at the US Federal Reserve System (Fed) in a study on the transformative potential and risks associated with the development of the DeFi sector.
What other data has been released? Researchers believe that the main threats are related to the lack of clear rules for regulating the industry. The Fed stressed that the authorities do not currently have the necessary tools to enforce the laws in the DeFi market.
Analysts also said that stricter oversight needs to be implemented for crypto companies handling customer funds. This should include comprehensive disclosure and capital and liquidity requirements. In addition, the researchers saw significant risks to economic stability if the digital asset market becomes more interconnected with traditional markets.
Earlier, experts at Bank of England Owen Lock and Teresa Cascino said that the widespread use of crypto assets in the metaverse could pose a systemic risk to financial stability and would require “strong consumer protection.” According to them, the threat is that large volumes of “real economic transactions” in cryptocurrencies will go through decentralized platforms.
Useful material?
Incidents
Roger Ver has been accused of not paying taxes
May 1, 2024
Mining
After the publication of the financial report, the company’s shares added 5%
Apr 30, 2024
Market
The commission had previously warned the developer of potential enforcement actions
Apr 29, 2024
Market
Funds can be seized by law enforcers due to links to illegal activity
Apr 26, 2024
Market
Tether Finance division will be responsible for the issuance and redemption of USDT stablecoins
Apr 18, 2024
Trends
The first project introduced on the platform will be BounceBit (BB)
Apr 18, 2024