The Financial Stability Board (FSB) will work with other international standard setters to determine how decentralized finance (DeFi) activities should be regulated across different jurisdictions, it said in a report published Thursday.
The FSB will also explore the extent to which its proposed policy recommendations for the crypto sector needs to be enhanced to address risks specific to DeFi, the report said. In collaboration with other international standard-setters, it also plans to explore how to fill data gaps in measuring and monitoring the interconnectedness of DeFi with traditional finance.
“DeFi does not differ substantially from traditional finance in the functions it performs or the vulnerabilities to which it is exposed,” the FSB said in a Thursday press release.
Regulators around the world have been monitoring how interlinked the crypto space has been with the real economy as businesses and banks dove into the sector during the crypto boom that started in 2021. Since then, billions have been wiped out from crypto markets and prompted successive collapses including that of token issuer Terra,
