Decentralization illusion central urges regulation crypto

DeFi’s Decentralization Myth

Throughout financial history, many speculative manias have been characterized by a repeated mix of basic ingredients: from the enthusiasm of uninformed investors motivated by “disruptive” innovations, the inevitable illusion of easy profits to the infallible reference to the “paradigm shift” that will supposedly sustain the momentum over time, often conveniently seasoned with abundant global liquidity. Decentralization illusion group urges regulation crypto Ponzi scammer posing as crypto investor sentenced to seven years. On October 31, the US Attorneys’ Office for the Western District of Texas announced the sentencing of Abner Tinoco, an El Paso resident who operated a Ponzi scheme in which he claimed to use investor funds to deal in cryptocurrency and foreign exchange markets. Tinoco took in approximately $9 million from investors and used more than half on personal extravagances. He used another portion of the funds to pay off early investors. Separately, the CFTC secured a consent decree against him. 

Decentralization illusion bank urges regulation crypto

Triggered by the Fed´s monetary tightening and over a few weeks, the crypto debacle comprised a succession of dramatic events, including: Bitcoin: a regulatory nightmare to a libertarian dream Decentralized Finance (“DeFi”) has grown in popularity due to its promise that it will, as its name suggests, disintermediate traditional finance structures. Total Value Locked, which represents all deposits in various DeFi platforms, grew from $1 billion in June 2020 to a peak of almost $200 billion in November 2021. As of April 2023, almost $54 billion is still deposited in DeFi platforms.

Innovating: digital settlement assets and central bank digital currencies

Cryptocurrency and Regulation of Official Digital Currency Bill 2021 set to be introduced in Parliament. GoI officials have stated that only ‘private cryptocurrency’ would be banned. This comes in the wake of several unsuccessful attempts of regulating cryptocurrency, such as the unpassed draft Bill in 2019, and Reserve Bank of India (RBI) circular in 2018 that was struck down by the Supreme Court in 2020. The Bill is eagerly awaited so as to understand the GoI’s position on blockchain products. They differ from cryptocurrencies by being intangible assets backed by blockchain technology. Save article to Dropbox Information Systems Legislation & Regulations eJournal

Decentralization illusion group urges regulation crypto

Aramonte, S., W. Huang and A. Schrimpf. 2021. “DeFi Risks and the Decentralisation Illusion.” Bank for International Settlements (BIS) Quarterly Review (December): 21–36. Vulnerable to Bank Runs The group flagged "severe" vulnerabilities with the industry, including highly-leveraged trades, liquidity issues and a lack of shock absorbers such as banks.