👉👉👉 Vietnam leads #DEFI in ASEAN, but trading dominated by institutional investors: #OECD
The OECD recently published a report shedding light on the expanding decentralized finance (DeFi) landscape in the Association of Southeast Asian Nations (ASEAN) region. Notably, Vietnam leads in DeFi adoption, with Thailand experiencing the swiftest growth.
However, despite promising growth, DeFi in ASEAN is predominantly driven by professional investors, with retail participation hampered by complexities and regulatory gaps. Although ASEAN nations aim for financial inclusion, over half of the region's 600 million residents remain unbanked.
Nonetheless, the region's youthful and tech-savvy population offers fertile ground for digital asset adoption.
Despite DeFi's goal of democratizing finance, ASEAN sees professional investors dominating, especially in East Asia, which boasts the highest institutional activity in DeFi worldwide.
Challenges like complexity, regulatory uncertainty, provision of non-compliant services, and non-custodial setups hinder retail involvement, as highlighted by both the OECD report and a paper by the Bank for International Settlements (BIS).
While more user-friendly DeFi platforms have emerged, they often lack transparency and offer overly complex and leveraged trading strategies for retail traders.
The OECD recommends regulatory intervention to encourage retail participation in DeFi. Moreover, traditional financial institutions could leverage DeFi in areas like atomic securities settlement.
Tokenization in DeFi presents cost savings, fractionalization benefits, and capital formation opportunities through DLT. The report follows an OECD-ASEAN forum in Seoul, where officials discussed digital asset regulation and emerging trends. South Korea's FSC Vice Chair emphasized the need for regulatory frameworks to manage risks and protect consumers.
Source - coingeek.com