As the world's countries work to come up with a regulatory framework to regulate the cryptocurrency market as well as specific segments of the industry, Marina Markezic, executive director of the European Crypto Initiative, predicts that the rules will DeFi in Europe could create significant barriers for crypto-native projects.

Marina Markezic, executive director of the European Crypto Initiative

Markezic mentioned the European Commission's upcoming DeFi report, scheduled for December 30, 2024, falls under the Markets for Crypto-Assets (MiCA) framework and will examine the feasibility of regulations. Specific regulations for the DeFi ecosystem:

“We think this regulation will make it easier for traditional players to enter this crypto space. We know that some banks are already thinking about issuing stablecoins… Certainly the licensing and compliance path for all crypto-native projects will become more difficult.”

The EU report aims to examine how decentralized systems are regulated, especially those without a clear issuer or service provider, such as decentralized exchanges . As a key result of the report, it can provide initial definitions of what constitutes decentralization in the eyes of managers.

“It's not the clear, simple and straightforward scenario but DeFi presented as a spectrum.”

This 'DeFi spectrum' will cover a wide variety of use cases, from fully decentralized systems, with no human control or intervention and operating independently, to blockchain systems. There are different levels of control and management.

Instead of setting strict regulations for the industry, legal experts advocate for clear standards. Sascha Drobnjak, former director of legal and compliance at Elusiv protocol, shares:

“I think it's important for governments, policymakers and industry to first have consensus on what actually constitutes DeFi.”

Drobnjak explains that converting proposed measures into enforceable regulations creates additional challenges:

“How and to whom can regulators apply supervisory measures when there are no visible actors in the system? What does it mean to become visible?”

“The more regulation is based on certain standards and principles rather than rigid rules, the easier it is to apply to future technological innovations.”

DeFi describes financial services that operate on public blockchains, primarily on the Ethereum network. It essentially replicates the services offered by banks and financial institutions (like lending, borrowing, trading or insurance) but operates without the need for those institutions as intermediaries.

The DeFi market is expected to expand in Europe in the coming years. Statista predicts the DeFi sector will generate approximately $6.69 billion in revenue by 2024, with a compound annual growth rate of 9.67% from 2024 to 2028, reaching a revenue of $9.68 billion by year 2028.

Source: https://tapchibitcoin.io/cac-quy-dinh-defi-cua-eu-se-can-tro-cac-du-an-goc-tien-dien-tu.html