MakerDAO founder Rune Christensen called for clear rules to regulate decentralized finance (DeFi). This is necessary for the broader integration of DeFi with the financial sector.
MakerDAO CEO Rune Christensen said this at an international conference organized by the World Economic Forum (WEF). The summit discussed issues related to the development of the decentralized finance industry.
Christensen believes there is a need to work out specific regulations for DeFi protocols used in trade finance, commercial real estate and other industries. He explained that today the DeFi industry has already reached great heights and is now radically different from what it was “in its original form.” Given that decentralized finance can effectively interact with the real world, DeFi projects must comply with all necessary rules and laws.
Germany and Switzerland have already established a legal framework according to which tokenized securities are subject to the same regulatory requirements as traditional investment instruments. At the same time, Christensen acknowledged that the involvement of regulators could greatly slow down DeFi’s entry into the real-world finance market.
Minister of Economy and Innovation of Lithuania Aušrinė Armonaitė also expressed her opinion on the regulation of decentralized finance. Armonaite believes that when working with such advanced financial technologies, regulators should not tighten their control, but, on the contrary, should focus on creating conditions for their development.
According to the minister, government agencies should be aware of the uniqueness of the DeFi space “even outside of fintech.” Armonaite invited regulators to engage in constructive dialogue with DeFi industry stakeholders to find a compromise. Regulations need to be developed that not only protect investors but also do not impede financial innovation.
As a reminder, last month the Financial Action Task Force (FATF) updated its guidelines to clarify the definitions of decentralized exchanges, non-fungible tokens (NFT) and DeFi. This may indicate an increased focus of the FATF on DeFi platforms.