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DeFi services are algorithmic-based services that rely on smart contracts and are delivered over distributed ledger technology platforms without intermediaries.
DeFi services are algorithmic-based services that rely on smart contracts and are delivered over distributed ledger technology platforms without intermediaries.
DeFi is an alternative system to CeFi.  CeFi facilitates lending and borrowing crytpoassets through an exchange.
:<span style="color:#4B0082">'''''DeFi's regulatory challenges'''''</span>
:"The highly decentralised and global structure of the DeFi sector along with the difficulty to trace end users provide a unique set of challenges for regulators.
:Even on an initial view it is clear that the sector is opaque, complex and undertakes financial activities that carry risk – activities that are regulated with the traditional financial sector.
:... the degree of decentralisation currently varies across platforms.
:However, in an extreme form, a DeFi platform could be completely decentralised with no identifiable legal entity, ownership nor even a point of human contact.
:DeFi is still in its early infancy but its rapid growth means that regulators, domestically and internationally, need to think seriously now about the risks of a broad range of financial services being effected through DeFi platforms and how to ensure risks are managed in the DeFi world to the same standards as they are managed in traditional finance."
:''Is 'crypto' a financial stability risk? - Bank of England - Jon Cunliffe, Deputy Governor, Financial Stability - October 2021.''
:<span style="color:#4B0082">'''''DeFi's channels of risk transmission'''''</span>
:"Although the size of the DeFi market itself is not large enough to be considered a risk to the stability of the markets, the DeFi space is still worth delving into as it is growing rapidly, attracting an increasing number of retail and institutional investors alike.
:Increased interest and adoption of cryptoassets by institutional investors and other traditional financial service providers in particular is leading to increased interconnections between CeFi and the parallel DeFi system and creates channels of risk transmission to the traditional markets and potentially the real economy."
:''OECD Symposium on Digitalisation and Finance in Asia - discussion paper - 2021.''




== See also ==
== See also ==
* [[Algorithm]]
* [[Centralised finance]]  (CeFi)
* [[Bank of England]]
* [[Cryptoasset exchange]]
* [[Blockchain Governance Initiative Network]]  (BGIN)
* [[CeFi]]
* [[Contagion]]
* [[Crypto]]
* [[Cryptoassets]]
* [[Cryptoassets]]
* [[Cryptocurrency]]
* [[Cryptocurrency]]
* [[Distributed ledger]]
* [[Decentralised finance]]
* [[Exchange]]
* [[Financial intermediary]]
* [[Financial stability]]
* [[Horizon scanning]]
* [[Organisation for Economic Co-operation and Development]]  (OECD)
* [[Platform]]
* [[Prudential]]
* [[Real economy]]
* [[Regulation]]
* [[Retail]]
* [[Risk evaluation]]
* [[Risk transmission]]
* [[Smart contract]]
* [[Systemic risk]]





Revision as of 05:55, 9 July 2022

Cryptoassets - cryptocurrencies.

DeFi is an abbreviation for decentralised finance.


DeFi enables the lending and borrowing of cryptoassets without using a central exchange.

DeFi services are algorithmic-based services that rely on smart contracts and are delivered over distributed ledger technology platforms without intermediaries.


See also


External link