DeFi Market Flourishes Amid Regulatory Recommendations & Global Calls for Joint Oversight
Summary:
This weekly edition of Finance Redefined reports on key decentralized finance (DeFi) insights, primarily focusing on a set of policy recommendations released by the International Organization of Securities Commissions (IOSCO). While some fear that these new policies may harm DeFi, others consider them harmless. In parallel, China's central bank called for global jurisdictions to jointly regulate DeFi. Despite these developments, the DeFi market continued to prosper this week. The report also mentions that the latest financial stability report by the People's Bank of China includes a specific section on crypto assets for the first time.
Welcome to Finance Redefined. This is your one-stop shop for crucial insights into decentralized finance (DeFi) — a weekly round-up that captures the most impactful happenings over the past week. The International Organization of Securities Commissions (IOSCO) introduced policy suggestions for the DeFi sector this week. The release stirred mixed reactions in the community, with some expressing concerns of it potentially being the downfall of DeFi, while others dismissed these fears. In the midst of IOSCO's actions, China's central bank also appealed to jurisdictions worldwide to jointly regulate the DeFi sector. Despite this, the DeFi ecosystem had a prosperous week, driven by the enduring bullish market, with a majority of tokens witnessing growth in their week-on-week trading charts.
This week saw the global securities watchdog IOSCO unveil nine policy recommendations for DeFi, urging for unified regulatory vigilance across jurisdictions. These fresh suggestions were published alongside the crypto and digital assets recommendations issued in November. Additionally, IOSCO put forth an explanation on how both sets of suggestions could synergize depending on the degree of decentralization of regulated bodies.
The reception to the IOSCO report was split – some perceived it as a threat to the existence of DeFi, while others regarded it as harmless. Mikko Ohtamaa, co-founder of Trading Protocol, categorize the report as a "final guide on how to exterminate DeFi." Contrarily, Matthew Harcourt of Apollo Crypto refuted this view. Harcourt declared to Cointelegraph that the suggestions were not lethal and highlighted IOSCO’s recognition of DeFi as an important technological advancement.
Furthermore, the People’s Bank of China (PBoC) also voiced its support for collective DeFi regulation in its recent financial stability report. The central bank devoted a segment of its report to crypto assets, emphasizing the necessity for united regulation efforts from different jurisdictions. Colin Wu, a local reporter, stated this was the first instance of the central bank focusing on crypto assets specifically.
A glance over the DeFi market data from Cointelegraph Markets Pro and TradingView reveals that the top 100 DeFi tokens by market capitalization experienced a bullish trend this week, with a majority of tokens showing growth in their week-on-week trading charts. The combined value locked in DeFi protocols persisted above $53 billion.
We hope our round-up of the most influential developments in the DeFi space this week was informative. Join us again next Friday for more enlightening stories, insights, and knowledge about this evolving field.
Published At
12/22/2023 11:00:00 PM
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