EU DeFi Rules: Banks Favored, Crypto Startups Challenge

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As an analyst with a background in finance and experience in the cryptocurrency industry, I believe that the new DeFi regulation in Europe holds both opportunities and challenges.

European New DeFi Regulations Could Favor Big Banks While Presenting Challenges for Crypto Startups.

As a crypto investor, I believe DeFi’s value is projected to reach $6.69 billion by the end of this year. Looking forward, the decentralized finance sector is expected to expand further and potentially hit $9.68 billion by 2028.

By the end of 2024, the European Commission is anticipated to release a report proposing regulations for Decentralized Finance (DeFi), a digital finance system built on blockchain technology that offers services such as lending and trading directly to users.

Based on Marina Markezic’s perspective, the forthcoming regulations are designed to advantage conventional financial institutions.

“This regulation could make it easier for traditional financial institutions, such as banks, to enter the cryptocurrency market. In fact, some banks are considering launching their own stablecoins.”

As a crypto investor, I can relate to the challenge regulators face when trying to classify Decentralized Finance (DeFi) systems in terms of regulatory oversight. It’s a complex issue because DeFi projects aim for decentralization and autonomy, which could make them fall outside the scope of traditional regulatory frameworks.

As a researcher studying the perspectives of legal experts on regulatory frameworks, I’ve come across Sascha Drobnjak’s viewpoint. Preferring transparency over strictness, Drobnjak, who once held the CEO position for Elusiv protocol’s legal and compliance team, believes that clear and open standards are more effective than inflexible rules.

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2024-04-27 00:36