EU Report Recommends DeFi Regulation Rethink

The week in DeFi saw European lawmakers write a new chapter on DeFi, Virginia county plans to put its pension fun in a DeFi yield, DeFi protocols lost $1.6 billion to exploits and more The past week in the decentralized finance (DeFi) ecosystem saw many new developments from an adoption perspective and protocol developments. The European Commission added a new chapter on DeFi, showing the growing impact of the nascent ecosystem, while a county in the United States State of Virginia wants to put its pension fund in a DeFi yield.DeFi exploits became the center of attention again as recent....

Brazilian Bitcoin Regulation: A new study looking at the economic impact of Bitcoin on behalf of Brazil's Federal Senate has advised against the regulation of digital currencies - at least for now. The 18 page report by Cesar Rodrigues van der Laan has been hailed by some digital currency enthusiasts for recommending a 'Bitcoin friendly' approach to regulation, but at the same time presents a generally pessimistic analysis of Bitcoin's chances of future success within the Brazilian economy. "Given their limited current range, especially in Brazil, we do not see systemic risk to the....

The report highlights the DeFi’s potential for lower financial audit costs and substantial opportunities for financial integration across borders Analysts from the European Commission showed an unexpected understanding of how decentralized finances (DeFi) actually function, having defined it as something different from the traditional financial system and acknowledged that it would require rethinking the approach to regulation. On Monday, May 2, a crypto venture advisor at Presight Capital and a long-term expert on European regulation, Patrick Hansen shared some important details from the....

DeFi developers seriously need to consider working with regulators on compliance issues if they want their projects to succeed. The U.S. Treasury’s Office of Foreign Assets Control (OFAC) issued sanctions against Tornado Cash this month, marking its first action against a decentralized finance (DeFi) mixer in what may prove to be a watershed moment for DeFi regulation.A lack of response and regulatory preparation from the industry is perhaps unsurprising of a mindset honed outside the rule of law. Yet, the potential of DeFi is threatened if its leaders do not face the reality that....

The IMF warns that central banks may have to rethink what constitutes their reserve currency holdings. In a recent study, the global lender points to the changing geopolitical landscape, technological advances and the impact of the Covid-19 pandemic as events likely to influence the composition of reserves. Advances in Financial Technologies In addition to the US dollar, other currencies like the Euro, the Japanese and the British pound act as settlement currencies in global trade. Still, the US dollar dominates when it comes to its status as the world’s reserve currency. However,....