The post French regulator recommends ‘disintermediated’ approach for DeFi regulation appeared on BitcoinEthereumNews.com.

The Autorité de Contrôle Prudentiel et de Résolution (ACPR), a part of the French Central Bank, has concluded its public consultation on the regulation of decentralized finance (DeFi). This consultation sought input from various stakeholders and experts within the cryptocurrency and blockchain space. The findings of the ACPR indicate that the term “disintermediated finance” may be more suitable than “decentralized finance” due to concerns regarding structural centralization patterns within DeFi. One of the key revelations from the ACPR’s consultation is the perception that DeFi is not as decentralized as its name suggests. The regulator points to what it describes as a “paradoxical high degree of concentration” within the DeFi space. This concentration primarily pertains to the physical infrastructure hosting blockchain nodes, with a central role played by cloud service providers. The ACPR’s concerns center around the potential risks associated with such centralization. The summary of the public consultation indicates that the “vast majority” of respondents favored the continued deployment of DeFi on public blockchains rather than private or permissioned ones. However, the ACPR acknowledges that even on public blockchains, regular audits are necessary to ensure security and compliance. This preference for public blockchains aligns with the core principles of transparency and open access associated with decentralized finance. Respondents to the consultation expressed a consensus on the need to regulate intermediaries within the DeFi ecosystem and to certify smart contracts. The importance of such regulation and certification is seen as a means to enhance security, transparency, and trust in the DeFi space. These measures aim to protect the interests of DeFi users and contribute to the overall integrity of the ecosystem. Regulatory recommendations from ACPR and ESMA on DeFi The ACPR finds it “advisable” to establish rules for the certification of smart contracts. This move aims to provide a clear framework…

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Filed under: News - @ October 13, 2023 12:18 pm