- Ripple president Monica Long believes that complying with on-chain regulations will be the “biggest breakthrough” in the DeFi space this year
- Long noted that DeFi is slowly shedding off speculative energy derived from NFTs and initial coin offerings
- The Ripple executive is also confident that DeFi can seamlessly integrate with existing systems
Ripple president Monica Long is confident that DeFi’s ability to honor blockchain-based rules and guidance from financial regulators will be the industry’s biggest achievement this year. Long noted that the DeFi industry has previously been controlled by erratic momentum from NFTs and initial coin offering cycles. According to her, the hype will fade and pave the way for meaningful DeFi application and interaction with conventional financial systems, something that’s likely to bring more people into the decentralized finance space.
Compliance Encourages a Happy Marriage
Speaking to Cointelegraph, the executive observed that the DeFi scene is ready for regulation, adding that innovators should look for ways to make it happen this year. For Long, complying with set rules, whether on-chain or from traditional regulators, eases the industry’s linkage with the conventional finance space setting the stage for mass adoption.
The Ripple executive noted that DeFi and compliance can form “a happy marriage,” something that will encourage society to tokenize, manage, move and store value.
Regulations in the crypto and DeFi scene have been a grey area with traditional financial regulators like the United States securities watchdog SEC yet to formulate DeFi-specific laws. DeFi executives have in the past disclosed that they’re open to embracing regulations to curb illicit activities on their platforms.
DeFi Needs AML Controls
The U.S. Treasury has also called for the implementation of AML controls in the DeFi world, with the European Securities and Markets Authority (ESMA) noting that decentralized finance exposes investors to serious risks.
With the Ripple executive predicting a shift in the forces driving the DeFi world and regulators agreeing there’s a need for compliance, it’s to be seen whether 2024 will be the year of DeFi compliance breakthrough.