The Global DeFi Coalition, which represents several crypto lobbying groups in the US, UK, Europe and Asia, has forwarded six proposals to the Financial Action Task Force (FATF) to regulate the burgeoning DeFi space. , the Block on July 6. reported.
Proposals from the DeFi Global Coalition
Global DeFi Coalition includes ACCESS of Singapore, Bitcoin Association of Switzerland, Blockchain Association of United States, Blockchain for Europe, CryptoUK, and International Association for Trusted Blockchain Applications (INATBA).
They represent over 350 companies with tentacles in DeFi.
The proposals forwarded will go a long way in guiding regulators in creating well-balanced rules that promote space growth.
At the same time, these proposals could help regulators catch up with the rapid pace of crypto and DeFi.
The coalition, for example, advises against introducing manual steps in DeFi, which is purely digital. On top of that, they call for practical and enforceable laws, recognizing the risk-mitigating characteristic of public channels.
Repression is equivalent to killing innovation
They fear that if regulators crack down on DeFi and crypto by extension, they will stifle innovation, discouraging new ideas.
To this end, lobbyists call for an open dialogue between regulators and industry players.
Crypto and blockchain proponents claim DeFi is the next chapter in financial innovation that has the potential to disrupt the megaliths dominating traditional financial ecosystems.
Unlike the traditional approach to finance, DeFi is an overhaul rooted in blockchain principles putting the end user first.
The operations have a global reach, are purely digital, non-custodial and presented as an excellent infrastructure to foster financial inclusion.
Since July 6, Pulse Challenge The data show DeFi protocols manage over $ 55 billion in assets in a purely decentralized setup.
User protection regulations
However, the lack of proper regulation and the sweepstakes, which have caused grief among investors in recent days, are cause for concern.
In combination with the apprehension of governments and regulators towards cryptocurrencies, global bodies are calling for enforceable laws for the protection and rationalization of customers.
The FATF is committed to ensuring compliance. A recent update found that nearly half of their reporting regulators have applied the KYC and CFT rules for virtual asset service providers (VASPs) operating in their jurisdictions.
As BTCManager reports, the Monetary Authority of Singapore (MAS) has implemented the FATF recommendations on crypto regulation.
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