DeFi Not Threatened by IOSCO's New Guidelines, Says Apollo Crypto Analyst
Summary:
Apollo Crypto analyst Matthew Harcourt suggests the new policy guidelines from the International Organization of Securities Commissions (IOSCO) aren't necessarily a threat to decentralized finance (DeFi). Though the guidelines urge regulation of DeFi under traditional financial rules, Harcourt contends they should not be seen as an outright attack on DeFi. While he concedes that these regulations might impact early-stage projects, he believes the inherent strengths of on-chain financial applications maintain DeFi's resilience.
Matthew Harcourt, an analyst at Apollo Crypto, suggests that the latest policy guidelines proposed by the International Organization of Securities Commissions (IOSCO) are not necessarily a dire threat to decentralized finance. IOSCO's report, released on December 19, maintained that the often untraceable and decentralized character of DeFi poses a distinctive regulatory challenge, and hence issued nine guidelines for controlling the sector. These include obligating individuals involved in operations and applying conventional financial market rules. Despite eliciting widespead concerns over the fate of DeFi, Harcourt argues against catastrophic interpretations.
Harcourt's viewpoint was shared with Cointelegraph and economized concerns regarding the potential consequences that the policy might have on DeFi, especially established protocols. He cautioned against interpreting the IOSCO's statement that DeFi constitutes a valuable, evolving, and expanding tech innovation, as negative. Apollo Crypto, the Melbourne-based investment company where Harcourt works, has a significant investment in DeFi projects.
With a 95% global market stake under its 130 members, the IOSCO urged policymakers to identify and regulate those responsible for the DeFi protocols under financial services rules. IOSCO guidelines apply to anyone with an influential role or control over the final product or service within DeFi. IOSCO further emphasized that similar to the conventional finance world, DeFi needs to adhere to international policies, norms, and jurisdictional regulatory frameworks. This also includes putting Decentralized Autonomous Organizations under similar regulatory standards as traditional financial firms.
Policies should equally apply to entities and individuals offering financial services and participating in financial activities, regardless of the technology, organizational forms, or terms used, as per the IOSCO. While not ideal from the standpoint of privacy, and likely to affect early-stage projects, Harcourt implored not to perceive these guidelines as an outright attack on DeFi. He believed that the inherent strengths of built-in financial applications preclude any existential risk to decentralized finance from these proposed rules.
Taking a similar stance on the broader crypto market, the IOSCO had previously issued guidelines on November 17 suggesting that digital asset markets should follow existing financial laws.
Published At
12/22/2023 7:01:19 AM
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