Decentralized Finance or DeFi has gained a lot of popularity in recent times and for a good reason. It allows individuals to have greater control and access to their wealth. With DeFi, the number of mediators is almost zero. Cryptocurrencies, as well as NFTs, are a part of the larger DeFi initiative. Due to this absence of mediators, there has been a lot of resistance from traditional investing sectors and authority bodies that support those sectors. However, the wind has begun to shift, and the whole world has realized that a DeFi world in the future is inevitable. Thus, government bodies are now beginning to imagine the possibility of DeFi being the major investing method/sector. For that, they have little to no regulation in the market.
According to Benoit Coeure, a BIS executive, people in the government have to think about regulations in 2022. He believes that the best platform for all regulators to come together is the Financial Stability Board. That way, it will be easier to regulate the DeFi world all over the globe. He also added that we’re still some years away from solid regulatory practices for DeFi.
These regulation policies could hinder the DeFi as of now, but they’ll also lend credibility to it. Thus, how the market reacts will only be revealed once the regulators come together and drop some policies. What this means for crypto enthusiasts and owners is quite uncertain. However, if DeFi is regulated properly, it can be embraced by the mainstream in a seamless manner.