“Lack of transparency”
Speaking at the Banque de France’s “Opportunities and Challenges of the Tokenisation of Finance” event on September 27, Jerome Powell said there are “significant structural issues surrounding a lack of transparency” in the DeFi ecosystem. That text followed a statement by Bank for International Settlements (BIS) director Augustín Carstens, who is concerned about the contrast between the DeFi world and the traditional financial world.
Carstens sees a “huge challenge” in the fact that the crypto has now been adopted worldwide and knows no borders. Powell also acknowledges that the impact of the DeFi world on the traditional financial system is still small. Which means that he doesn’t see any problems for the stability of the financial system at the moment. However, that could change.
Powell expects growth for DeFi
Despite the current crypto winter, Jerome Powell expects the DeFi world to grow significantly in the coming years. However, as of December’s all-time high, the total value in DeFi protocols is up 71 percent decreased to about $62 billion. That decline is roughly in line with the rest of the market, which has also lost more than 70 percent from its all-time high.
Most of the market is “waiting” for the regulation from the United States, so that the Wild West image of the crypto world finally gets a boost. Many major players are likely to delay investing due to the legal uncertainty surrounding the industry. Once it is certain that Bitcoin will not just disappear, it becomes easier for parties to invest.
