US CFTC releases report on DeFi sector issues
US CFTC releases report on DeFi sector issues
The Commodity Futures Trading Commission's (CFTC) Subcommittee on Digital Assets and Blockchain Technology has released a detailed report on decentralized finance.
The report outlines current trends in DeFi, including promising prospects as well as heightened risks and challenges. The report should alert U.S. Congressional policymakers and regulators to the shortcomings of cryptocurrency asset controls in the decentralized finance space.
Commissioner Christie Goldsmith Romero, who presented the report, emphasized the need for solutions at the level of the U.S. Congress, state legislatures, and regulators, CoinGape reported.
The report states that the main concern is to secure private transactions in a peer-to-peer decentralized financial system for cryptoasset holders, while it is important to address the risks of illegal activity and systemic issues.
The CFTC presented its recommendations for controlling DeFi, including increasing knowledge about DeFi, developing enforcement effectiveness, and improving the regulatory framework to mitigate the associated risks. One of the main problems outlined in the report is the lack of clear lines of responsibility and accountability in DeFi systems.
Ari Redbord of the CFTC Advisory Committee explained that DeFi is the future of blockchain technology, as financial services are conducted without traditional intermediaries, allowing for peer-to-peer transactions.
Nevertheless, the report calls for increased oversight and regulation of DeFi, with recommendations already issued in December by the International Organization of Securities Commissions. The CFTC believes there needs to be an expanded debate about regulating the decentralized ecosystem and a shift in the spectrum of congressional attention away from stablecoin legislation.
The report emphasizes that the benefits and risks of DeFi are inextricably linked to the design and characteristics of specific systems. It is also worth noting that most DeFi systems remain at a crossroads between full centralization and decentralization.
Given the enormous potential of DeFi, the report calls for a stakeholder dialogue to develop rules for the emerging technology and invites discussion and comment until January 15.
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