Ron Christensen, founder and CEO of DeFi bluechip MakerDAO, says decentralized financing is moving from the current, insulated bubble phase to more integration with the wider economic landscape.

Christensen said this Tuesday at the plenary session “behind the hype over decentralized financing” at the ongoing global technology governance summit being hosted by the World Economic Forum.

DeFi protocols that interact with real assets like commercial real estate and trade finance will require significant regulatory intervention, according to MakerDAO CEO, stating:

“The big difference between the original DeFi building soup and DeFi in the real world is that you now have to obey the rules and laws.”
In fact, de-physicalisation of securities is an already existing example of a new trend in crypto intensification. Countries like Germany and Switzerland have already created a legal framework that allows coded securities to be subject to the same regulatory requirements as traditional investment vehicles.

Christensen acknowledged that Davie’s entry into the real world with regulators could be much slower than the progress that brought the niche market segment to a $ 100 billion valuation.

According to Osrin Armonite, Lithuania’s Minister of Economy and Innovation, regulators need to implement a “learn more, punish less” approach when dealing with financial technologies such as DeFi.

During the meeting, Armonaite stated that regulators and government agencies should be aware of the uniqueness of the DeFi room even outside of fintech.

According to the Lithuanian minister, regulators must enter into constructive dialogue with DeFi’s stakeholders in order to achieve temporary regulations that protect investors without stifling economic innovation.

DeFi regulations are increasingly becoming the subject of debate among many stakeholders, and regulators are said to be looking at implementing the law in a growing ecosystem.

Last March, the Financial Action Task Force on Money Laundering published an updated version of draft guidelines on cryptocurrencies that have major implications for the DeFi Chamber. This document likely indicates a growing intention by regulators to implement KYC compliance protocols for DeFi platforms.

Source: CoinTelegraph