Revolutionising Banking Through the Power of DeFi

An Uneven Regulatory Landscape

After years of uncertainty, the direction of travel for DeFi regulation is becoming clearer. Some jurisdictions are taking a more permissive view while others – notably including the US – are following a more activist approach.

The MAS (Monetary Authority of Singapore) believes in the potential of distributed ledgers like Blockchain or Ethereum for transformative economic progress. But it is wary of the speculative bubbles around cryptocurrencies. Its approach has been to rein in speculation, while encouraging the use of DeFi technologies, like distributed ledgers, within Singapore’s financial infrastructure.

Other jurisdictions take a different view. The US, for example, has seen debate among different regulators about the very nature of cryptocurrency. The SEC (Securities and Exchange Commission) sees crypto assets as securities; the CFTC (Commodity Futures Trading Commission) views them as derivative contracts; while the Federal Reserve has argued they are banking products.

In mid-2023, the SEC launched a crackdown on two leading crypto exchanges, Binance and Coinbase, accusing both organisations of acting as unlicenced securities brokers. The case exemplifies regulators’ concerns over the role of DeFi in retail markets5.

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