World Economic Forum Releases DeFi Regulatory Policy Toolkit

As regulated decentralized finance (reg-DeFi) has become Discussion topic Inside and outside the encryption field, the World Economic Forum (WEF) has released a policy toolkit on DeFi.

According to news released on Tuesday, the toolkit aims to provide regulatory agencies and government decision makers with useful guidance on DeFi regulations.

According to reports, the World Economic Forum and the Wharton School of the University of Pennsylvania’s blockchain and digital asset projects are cooperating. DeFi entrepreneurs, legal experts, and financial regulators have also developed the toolkit in cooperation with the World Economic Forum.

Financial regulatory agencies involved in the formulation of the policy framework include representatives from U.S. agencies and those involved in the formulation of European plans Crypto Asset Market (MiCA) Regulations.

As part of the announcement, WEF stated that its toolkit provides a basis for examining key factors related to DeFi regulations.with national And intergovernmental agencies seeking Formulate and enforce DeFi regulations, Some stakeholders said that small start-ups in emerging industries may be deprived of rights.

In fact, the work of the European Commission on the MiCA regulatory framework has attracted great attention from industry stakeholders.As early as March, the International Trusted Blockchain Application Association (INATBA) believed that certain provisions of the proposed regulations would lead to Crypto startups are at a disadvantage Compared with traditional financial industry players.

According to Sheila Warren, deputy director of the Center for the Fourth Industrial Revolution of the World Economic Forum, these concerns are included in the toolkit. Warren told Cointelegraph: “This is something we spent a lot of time thinking about, whether it’s in terms of supporting startups to promote innovation, or in terms of what it means to visit,”

“Part of DeFi’s promise is a more democratic way to participate in financial services, whether it’s loans, insurance or other. In some cases, compliance costs may mean that certain participants are prevented from entering the market, which will stifle innovation. , It will replicate the existing power differences in the current system.”

Warren also talked about the need to balance decentralization and privacy issues through regulations aimed at combating illegal activities such as money laundering. Warren believes that regulation should not be regarded as the ultimate goal, but should use incentive and reward mechanisms commonly found in decentralized network consensus to combat the activities of bad actors.

As MakerDAO co-founder Rune Christensen has already said, Regulatory clarity is necessary for the interaction of DeFi with real-world assetsThese regulations may cover investor protection and anti-money laundering issues.

Warren believes that consumer protection, taxation, and anti-money laundering efforts should not weaken decentralization, noting that:

“I think decentralization is essential to the DeFi ecosystem-the most exciting opportunities in the DeFi ecosystem are related to this aspect, especially in terms of governance.”

As of this writing, data from DappRadar shows that the adjusted total value locked in the DeFi market exceeds $67 billion. DeFi used to be a niche market space on the Ethereum network, and is now causing a sensation on other chains including Binance Smart Chain.