DeFi Under the International Eye

Market Meditations | March 25, 2022

Decentralized Finance’s rapid growth first garnered retail investors’ attention. Then institutions began taking notice. Now it’s popping up on the radar all over the world.

  • The International Organization of Securities (IOSCO) is an international body bringing world securities regulators together to function as the global standard for securities.
  • Yesterday, IOSCO published a report tasked with giving a perspective on decentralized finance. The highlights of this report were those deemed as the most likely to be potential areas of concern for regulators.
  • The report draws a close correlation between DeFi tools and traditional finance markets.
  • IOSCO also noted the overlap between decentralized products, services, arrangements, and activities with traditional finance operations.
  • On a positive note, the report did recognize that there are many benefits native to DeFi. “DeFi is a novel and fast-growing area of financial services.” Said IOSCO chair Ashely Alder.

There are more metrics than just TVL to measure the growth of decentralized finance. Often seen as regrettable, coming under the regulatory eye is an inevitable milestone cryptocurrency and DeFi alike must pass. Doing so on the international stage is no insignificant set of growing pains.

The devil’s in the details. Read the full IOSCO report here.