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The Autorité des Marchés Financiers (AMF) has stated that the strategy of “identical actions, identical dangers, identical regulation” ought to apply “unambiguously” when regulating DeFi.
The French markets regulator laid out its opinion on regulating decentralized finance (DeFi) in a dialogue paper revealed on June 19.
Nevertheless, the watchdog highlighted that DeFi poses extra dangers than the standard monetary sector. Regulators, due to this fact, want to deal with dangers equivalent to cash laundering and terrorist financing along with implementing know-your-customer (KYC) procedures, as the usage of pseudonyms is widespread in DeFi transactions.
Furthermore, since DeFi actions typically transcend borders, the AMF known as for international cooperation in regulating the market. The dialogue paper, which articulates the regulator’s “preliminary pondering” on DeFi regulation, famous:
“Because of the cross‐border nature and attain of DeFi actions, the AMF additionally helps the event of a world coordinated strategy in the direction of regulation to make sure a world degree‐enjoying area, which ought to each purpose to guard traders and foster innovation.”
Earlier this 12 months, the Monetary Stability Board stated it’s already working with international customary setters to find out the trail to manage DeFi. Moreover, two working teams for the worldwide securities regulator IOSCO are scheduled to publish the suggestions on DeFi regulation by the tip of 2023.
The AMF stated it helps all these initiatives that may allow the emergence of a “balanced regulatory framework.”
Balancing innovation with buyer safety
The AMF, which points licenses to crypto companies within the nation, famous that there’s a want for a “clear framework with safeguards” for DeFi protocols. Latest market debacles just like the Terra-Luna crash have solely emphasised the dearth of readability within the area, the regulator famous.
In response to the AMF, DeFi “laws needs to be thought in a progressive and proportionate method.” In different phrases, laws ought to weigh the potential advantages of DeFi with the dangers they pose to customers.
The regulator added that the approaching years will likely be essential and doubly difficult for the DeFi sector. On the one hand, the sector has to discover a clear and safe technique of development that encourages innovation. Then again, the area has to supply “satisfactory ranges of investor safety,” the AMF famous.
The publish French regulator requires international coordination on “identical threat, identical regulation” coverage for DeFi appeared first on CryptoSlate.
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