Regulatory Arm of UAE Financial Centre Releases Defi Discussion Paper – Abu Dhabi Global Market (ADGM), the regulatory arm of the UAE’s financial center, has produced a discussion paper requesting input from stakeholders on the regulation of decentralized finance (defi). The report also clarifies the regulator’s position on defi transactions’ anonymity.
The FSRA, a regulatory arm of the ADGM, a financial center in the United Arab Emirates, has released a discussion paper seeking public input on policy considerations for decentralized finance.
The FSRA admits in the paper that the defi space has seen considerable development in terms of both the number of users and the value of such transactions since the document’s release.
The discussion paper will serve as a starting point for a conversation on how Defi may be eventually regulated, according to the regulatory arm.
Despite this, the FSRA stated that the report is not intended to serve as advice for financial institutions. Instead, the study presents the regulator’s assessment of the expected medium-term trend over the next 5 to 10 years.
The discussion document also includes the regulatory arm’s high-level policy perspectives on how the FSRA could consider regulating Defi, and other information. The text also lays out the outlines of a potential regulatory framework for defi.
Emmanuel Givanakis, CEO of the FSRA, made the following remarks after the paper’s launch:
“DeFi is a new component of the global financial ecosystem that promises to deliver more efficient and customized financial services. To realize this potential, the dangers associated with DeFi must be addressed effectively. In collaboration with industry practitioners, we are glad to add our perspectives on DeFi and its likely future path to the ongoing community conversation.”
Regulatory Arm of UAE Financial Centre Releases Defi Discussion Paper – Stakeholder input, according to Givanakis, will assist the regulator make more informed policy decisions, which will address the risks associated with decentralized finance.