French regulator sees DeFi as ‘disintermediated,’ not ‘decentralized’


On Oct. 12, the Autorité de Contrôle Prudentiel et de Résolution (ACPR), a part of the French Central Bank, revealed a summary of its public session on a regulatory framework for decentralized finance (DeFi).

The public session lasted two months, from April to May 2023, in response to the preliminary paper discussing doable rules for DeFi within the nation. External contributions nudged the ACPR to shocking revelations, particularly concerning the structural persistence of centralization patterns:

“The ACPR therefore believes that the term ‘disintermediated’ finance is more appropriate than that of ‘decentralized’ finance.”

The operational danger of this “paradoxical high degree of concentration” in DeFi considerations the bodily infrastructure internet hosting blockchain nodes, by which cloud service suppliers play a central function.

Related: CBDC lays foundation for new global monetary system: French central bank

According to the abstract, the “vast majority” of respondents advocate that DeFi ought to proceed to be deployed on public blockchains fairly than on personal or permissioned ones. However, they admit that these blockchains have to be audited regularly. Proposals to control intermediaries and certify sensible contracts had been additionally met with broad consensus.

In conclusion, the ACPR finds it “advisable” to attract up guidelines for the certification of sensible contracts, outline governance that will shield DeFi clients, and lay down measures supporting DeFi’s blockchain infrastructures.

On Oct. 11, the European Securities and Markets Authority (ESMA) additionally weighed in on the discussion on DeFi. In a 22-page report, the ESMA admitted the promised advantages of DeFi, such as better monetary inclusion, the event of progressive monetary merchandise and the enhancement of monetary transactions’ pace, safety and prices, whereas additionally highlighting its “significant risks.”

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