The decentralised nature of DeFi raises the question of how to implement any policy provisions. We argue that full decentralisation in DeFi is an illusion. And indeed, platforms have groups of stakeholders that take and implement decisions, exercising managerial or ownership benefits. These groups, and the governance protocols on which their interactions are based, are the natural entry points for policymakers. These entry points should allow public authorities to contain DeFi-related issues before this ecosystem attains systemic importance. Regulatory safeguards would also help to ensure that the innovative potential of DeFi brings overall benefits to finance.
Sectors Realizing the Full Potential of DeFi Protocols In 2020
The rapid evolution of blockchain technology and the potential disruption it can bring requires institutions to get ahead of the curve to avoid being left behind. This is not meant to suggest every institution needs to be a leader, but it does require institutions to form a house view on the future of DeFi and the implications for the business, and then define the relevant participation and operating models to fulfill their ambitions. This is not a one-off exercise. It should be iterative given the dynamic nature of blockchain and DeFi protocols. 2ff7e9595c
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