The European Commission’s Directorate General for Financial Stability, Financial Services, and Capital Markets Union (DG FISMA) organised, on 21st October 2022, a webinar featuring Mr Tarik Roukny, Assistant Professor of Finance at the Faculty of Economics and Business at KU Leuven, who presented his research on how DeFi addresses long-standing information frictions in financial markets and the impact this could have on public policy. The webinar focused on both the benefits of DeFi, such as universal access, transparent and deterministic rules, non-custodial services, and interoperable and composable protocols, as well as the potential risks, such as concerns about pseudonymity and limited control over agents, consumer harm, and more financial instability. Mr Tarik also put forth potential policy approaches to the DeFi ecosystem, such as (but not limited to) voluntary compliance, public observatories, and oracles.
Mr Mattias Levin, Deputy Head of Unit for Digital Finance at the European Commission, DG FISMA, stated during the webinar that the European Commission will continue to monitor the development, applications, and use cases of DeFi. Nevertheless, there is no plan to propose specific legislation as of yet because the complexity and technicalities of DeFi must be unpacked first.
