With the increasing capitalization of the cryptocurrency market, the DeFi sector may pose long-term risks to financial stability. This was stated by the experts of the research group. fed.

According to analysts, the threat is related to the lack of clear rules for regulating decentralized applications. In a published study, they noted that the industry has not yet become “systematically important,” but that government departments should pay more attention to it.

“The rapid growth of the role [программируемых] Blockchain suggests that policymakers should start thinking seriously about all the financial stability issues that may arise if such activities become systematically significant.”

The Fed stressed that regulators do not have the necessary tools to enforce the laws and regulations in DeFi. According to experts, industry players “will seize any lucrative opportunity, regardless of supervisors’ fears.”

The Fed also published a separate study on the impact of digital assets on financial stability. Analysts noted the need for tighter control over crypto companies working with client funds.

“Surveillance when needed, comprehensive disclosure, and capital and liquidity requirements can increase the resilience of organizations in the digital asset ecosystem. For example, central entities that act as counterparties to retail users often do not have capital, liquidity or comprehensive disclosure requirements.

According to analysts, the cryptocurrency industry is “prone to accumulating financial vulnerabilities.” However, the Fed described the risks to economic stability as “small”. This is due to the limited relevance of digital assets to the traditional market.

“These risks could quickly become significant if the digital financial system becomes more connected to the traditional one or expands the scope of financial services,” they added.

Recall that in July 2022, Fed Vice Chairman Lael Brainard called for tighter regulation of the cryptocurrency industry.