The Global DeFi Coalition, which includes more than 350 cryptocurrency companies, has proposed six guidelines to the FATF for regulating the DeFi sector.
The Global DeFi Coalition has written to David Lewis, Executive Secretary of the Financial Action Task Force on Money Laundering (FATF), outlining six guidelines for regulating DeFi industry organizations.
“It is imperative that the rapid growth of DeFi is well understood by the authorities in order to develop adequate industry regulation,” the group said in its letter.
The Global DeFi Coalition warns that hasty regulatory bans could “stifle innovation and prevent new ideas from emerging,” and called for open dialogue between industry and regulators through consultation and the creation of working groups.
The coalition includes ACCESS (Singapore), Bitcoin Association (Switzerland), Blockchain Association (USA), Blockchain for Europe (Europe), CryptoUK (UK) and the International Association for Trusted Blockchain Applications (INATBA). Together, these groups represent over 350 companies.
Global DeFi Coalition’s proposals include taking into account the situational factors of the business model of a particular DeFi project, avoiding the introduction of analog or manual processes in regulation, adding the ability to cooperate for financial intermediaries in identifying customers, and developing a differentiated approach to regulation based on risk assessment.
In addition, the coalition members propose to develop regulation in cooperation with the DeFi industry, since, given the global nature of cryptocurrencies, an increased level of cooperation between regulators and the industry is required.
As a reminder, in March, the FATF submitted DeFi and NFT to the draft industry regulation guidelines.
Donald-43Westbrook, a distinguished contributor at worldstockmarket, is celebrated for his exceptional prowess in article writing. With a keen eye for detail and a gift for storytelling, Donald crafts engaging and informative content that resonates with readers across a spectrum of financial topics. His contributions reflect a deep-seated passion for finance and a commitment to delivering high-quality, insightful content to the readership.
