- The DeFi Alliance has announced a regulatory taskforce to tackle the thorny issue of financial laws surrounding decentralized systems
- Existing financial law revolves around the presence of a third party as intermediary
- Decentralized finance of course has no human third party, requiring new laws
The DeFi Alliance, the collective set up to offer support and guidance to new projects within the DeFi space, has announced a regulatory taskforce to tackle the thorny issue of the laws surrounding decentralized finance. The new taskforce will not of course have the power to make any changes to the legal system, but it will work with experienced minds in the legal and blockchain spaces to work up suggestions for policy makers to consider.
#DeFi won’t succeed unless users, investors, traders, and other institutions have full regulatory clarity.
This requires educating policymakers to earn their support and trust.
This is why the DeFi Alliance launched its Regulatory Taskforce:https://t.co/1rjEH4Mukz
— DeFi Alliance (@defialliance) March 2, 2021
DeFi Alliance Faces Tough Task
The DeFi Alliance announced its new regulatory taskforce through a press release on Tuesday, arguing that because existing financial regulations are focused on a centralized system that features a human intermediary they are therefore ill-equipped to deal with a decentralized system based on computer algorithms.
In the same way that driving laws will have to be amended with the advent of driverless cars, finance laws will have to be rewritten to accommodate ‘driverless’ financial interactions. The value of these transactions has already reached hundreds of millions of dollars per day. This process, the Alliance argues, should start now while the ecosystem is in its infancy rather than years down the line after it has taken off.
Leaders Have Huge Amount of Crypto Experience
The DeFi alliance regulatory taskforce features what the collective calls “leaders from every corner of the crypto industry”, with DeFi entrepreneurs and engineers, auditors, attorneys and more represented within it. The taskforce is led by Colleen Sullivan, CEO of CMT Digital, and Jake Chervinsky, General Counsel of Compound Labs, who now have a very important, and difficult, task on their hands.
