United States Federal Reserve chairman Jerome Powell has spoken out about the expansion of decentralized finance (DeFi) and its impact on the traditional finance ecosystem, calling for appropriate regulation.
During an event titled the “Opportunities and challenges of the tokenisation of finance” hosted by the Banque de France on Tuesday, Jerome Powell said there were “very significant structural issues around the lack of transparency” in the DeFi ecosystem.
The comments followed those by Bank for International Settlements (BIS) general manager Agustín Carstens who expressed concern over the contrast between DeFi and traditional finance.
Carstens added that the “huge challenge” that they, central bankers and regulators, face is that the DeFi and crypto world is global and borderless.
Powell acknowledged that the interaction between DeFi and the banking system has not been significant from a financial stability viewpoint, limiting the impacts of the “DeFi winter.” However, it...
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