The French regulator sees Defy as ‘decentralised’ and not ‘decentralised’.
On October 12, the Autorité de Contrôle Prudentiel et de Résolution (ACPR), part of the French central bank, published a summary of the public consultation on the regulatory framework for decentralized finance (DeFi).
The public consultation will last for two months from April to May 2023, and is based on the first paper to discuss possible regulations for DeFi in the country. External contributions have propelled the ACPR with surprising revelations, particularly regarding the structural persistence of centralization patterns:
“AcPR therefore believes that ‘decentralized' finance is more appropriate than the term ‘decentralised' finance.
The operational risk of this “paradoxical high degree of concentration” in DeFi concerns the physical infrastructure that hosts the blockchain nodes, with cloud service providers playing a central role.
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According to the summary, “most” respondents argue that DeFi should continue to be installed on public blockchains, not on private or permissioned ones. However, they admit that these restrictions need to be audited regularly. Ideas to regulate intermediaries and validate smart contracts have also been widely agreed upon.
In conclusion, the ACPR finds it “recommended” to enact rules to certify smart contracts, define governance that protects DeFi customers, and develop measures to support DeFi's blockchain infrastructure.
On October 11, the European Securities and Markets Authority (ESMA) weighed in on the discussion on DeFi. In a 22-page report, ESMA acknowledged DeFi's promised benefits of financial inclusion, the development of innovative financial products, and increasing the speed, security and cost of financial transactions.
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