Financial Times Warns Over DeFi (Decentralized Finance)
The world of Decentralized Finance was all the hype of the past summer when several DeFi food coins were caught up in a scandal whilst others climber to heights unseen. As Sushi, Kimchi and other food coins turned the cryptosphere on it’s head, even Vitalik Buterin warned that some of these yield farming coins were not to be trusted.
Six months on since then and DeFi has come roaring back from the dead it seems. With Chainlink and YFI reaching for their all-time-highs once again as Bitcoin seems locked between $30,000 and $40,000, DeFi looks more alive than ever.
In fact, it has by now even hit classic financial media.
Just as autonomous cars brought new risks that legacy rules never considered, #DeFi is raising similar questions, as our current bank regulations exist mainly to prevent human failings. @BrianBrooksOCC considers how regulators should respond via @FT:https://t.co/Y3KJ1n4SXA— Emily K. Schultz (@EmilyKSchultz) January 12, 2021
The original Buzzfeed article of last February that warned people that you would be able to secure a loan simply by having some crypto in your wallet has by now been replaced by a stark warning by none other than the influential Financial Times, who claimed that the fast growing world of DeFi should be regulated.
The opinion piece realized that just as cars and drivers will soon be replaced by self-driving versions:
Banking is headed down the same road. And it’s being driven by the technology behind decentralized finance, or DeFi. But just as the original rules of the road protected us from other drivers, so our current bank regulations exist mainly to prevent human failings.
As crypto and DeFi continues to grow, expect these warnings to grow as well. The XRP lawsuit was only the beginning it seems. Classic finance will not accept a crypto takeover lying down.