DeFi
AMF publishes summary of responses received to its discussion paper on decentralized finance
AMF work on decentralized finance
In June 2023, the AMF shared its initial thoughts on the regulatory challenges posed by new crypto-asset activities based on the use of automated, decentralized and disintermediated protocols that make up the emerging DeFi ecosystem. To this end, the AMF published a discussion paper that raises a number of points to help inform the regulatory debate on the subject, inviting stakeholders to provide their comments to support the reflection.
The AMF is publishing a summary of the many responses it received, covering the various themes of the discussion paper, including the criteria for defining DeFi, the nature of blockchain protocols, considerations on smart contracts, questions relating to the nature of open source code, the risks of DeFi trading protocols and governance issues.
Overall, respondents showed support for the idea of developing a regulatory framework for DeFi that would both allow the ecosystem to grow while adequately addressing the risks posed.
The AMF would like to thank the respondents to its note, and intends to continue the discussion with all the stakeholders concerned, with a view to supporting the emergence of a regulatory framework conducive to the balanced development of decentralized finance.
Regulatory considerations and follow-up work
The AMF would like to point out that this publication is part of broader regulatory work carried out on DeFi at several levels.
In France, the Autorité de Contrôle Prudentiel et de Résolution (ACPR) published a discussion paper on DeFi in 2023, and further discussions on legal aspects are also taking place under the leadership of the Haut Comité Juridique de Place (HCJP). In early 2024, the AMF and ACPR also launched a joint initiative, under the patronage of the ACPR-AMF Fintech Forum, and in close collaboration with stakeholders and organizations representing the ecosystem in France, to explore the issue of smart contract certification as a possible element of a future DeFi regulatory framework.
At European level, following the entry into force of the MiCA Regulation, the European Commission will produce a report on the assessment of the development of decentralised finance and the appropriate regulatory treatment of decentralised crypto-asset systems, as well as an assessment of the need for and feasibility of regulating decentralised finance.
At the international level, the International Organization of Securities Commissions (IOSCO), of which the AMF is an active member, the Financial Stability Board (FSB), the Bank for International Settlements (BIS) and the Organization for Economic Co-operation and Development (OECD) have also published reports providing considerations or recommendations on DeFi.