Federal Reserve Chairman Jerome Powell emphasized that decentralized finance (defi) has “very significant structural issues” and that there is a “real need” for more appropriate regulation of the defi ecosystem.
Fed Chairman Jerome Powell on Defy Rules
Federal Reserve Chairman Jerome Powell spoke on Decentralized Finance (defi) Tuesday at a forum on digital finance organized by the Banque de France.
“What we’re seeing around the world is the normalization of monetary policy,” Powell began. “All it did was reveal what we have long pointed to as significant structural issues in the ecology of problems and conflicts of interest.” He emphasized.
In the Diffie ecosystem, there are these very significant structural issues with transparency – lack of transparency.
“The good news is… in terms of financial stability, the interaction between the DeFi ecosystem and the traditional banking system and the traditional financial system is not that big at this point. So we got to see Diffie’s summer. It did not have significant effects on the banking system and broader financial stability,” Powell outlined.
“It’s a good thing,” he exclaimed. “I think it will show the weaknesses and the work that needs to be done carefully and carefully around the guidelines and it will give us some time.”
However, the Federal Reserve chairman warned that the situation “will not last forever”. “Ultimately, that’s not a stable balance and we have to be very careful … how crypto activities get around regulation,” he explains:
Either way… as Diffie expands and begins to touch more retail customers, the appropriate regulation is in place.
Christine Lagarde, President of the European Central Bank, and Agustin Carstens, General Manager of the Bank for International Settlements, participated in the discussion. Both agree with Powell and similarly emphasize the need for proper management of ecosystems.
What do you think about Fed Chairman Jerome Powell’s comments about the defi rule? Let us know in the comments section below.
Image credits: Shutterstock, Pixabay, Wiki Commons
DisclaimerThis article is for informational purposes only. It is not an offer or solicitation to buy or sell, or a recommendation or endorsement of any products, services or companies. Bitcoin.com does not provide investment, tax, legal or accounting advice. Neither the Company nor the Author shall be liable, directly or indirectly, for any damages or losses arising out of the use of or reliance on any content, goods or services referred to in this paragraph.