The Financial Stability Board (FSB) said it will work with other legislators and international developers of financial standards to assess the need to regulate the decentralised finance (DeFi) sector in various jurisdictions.
The FSB issued a statement highlighting the need to explore methods for dealing with the potential risks associated with the DeFi market. They intend to work with other global regulators to develop solutions to security problems that apply to both DeFi and traditional finance (TradFi).
Representatives of the organisation state:
"Defi is not significantly different from traditional finance in terms of its functions or vulnerabilities."
Therefore, they have proposed a structure for global regulation of cryptocurrency activities; they intend to publish the final regulatory structure by July 2023.
Their study showed that there is currently only limited interaction between DeFi, the real economy and TradFi. They stressed that if DeFi continues to develop, it could lead to further negative consequences.
