- Failure to regulate the DeFi sector could entail risks to financial stability
- AFME proposes a classification mechanism for DeFi and digital assets
The Association of European Financial Markets (AFME) has warned regulators of the risks of excluding decentralized finance from the regulatory framework. The agency said such a decision could cause “risks to financial stability” and create opportunities for arbitrage.
In the document, the association points out that proper attention must be paid to decentralized activities, as both the EU and the UK are actively working to develop cryptocurrency regimes.
“Our position is that decentralized finance and related activities must be adequately incorporated into the regulatory perimeter, in order to manage the risks that arise