Challenges and Approaches to Regulating Decentralized Finance
Bibliographic Data
| ID | 4948755 |
|---|---|
| Authors | Iwa Salami (0000-0003-4864-5863, University of East London, corresponding author) |
| Year | 2021 |
| Volume | 115 |
| Pages | 425-429 |
| Publication date | 2021-01-01 |
| Open Access | Yes |
| Type | ARTICLE |
| Venue | AJIL Unbound (JOURNAL) |
| Journal identifiers | ISSN: 2398-7723 • E-ISSN: 2398-7723 |
| Publisher | Cambridge University Press (CUP) (PUBLISHER) |
| DOI | 10.1017/aju.2021.66 |
| OpenAlex | W4205837293 |
| Language | EN |
| Citations received | 3 |
Decentralized finance (DeFi) is an ecosystem of financial applications that are built on top of blockchain networks. DeFi aims to create an open-source, permissionless, and transparent financial system that operates without any central authority. Instead, a smart contract-which is a self-executing contract with the terms of the agreement between transacting parties written into lines of code-replaces financial institutions in the transaction. As a result, DeFi is available to everyone with reliable access to electricity and Internet connectivity. It also serves as a form of non-custodial finance since users maintain full control of their assets and transact through smart contract programs that facilitate peer-to-peer interactions. While DeFi presents huge opportunities, it also poses significant risks to traditional finance ecosystems, including the use of stablecoins and the absence of a know-your-customer framework. This essay argues that for DeFi to secure credibility, it needs to be adequately regulated in a way that aligns with how the technology works
Business · Computer security · Credibility · Cryptocurrency · Database · Database transaction · Financial services · Smart contract · Blockchain Technology Applications and Security · Computer Science · FinTech, Crowdfunding, Digital Finance · Sharing Economy and Platforms · Finance
| Citations per year | 1.5 |
|---|---|
| Citation span | 2024 - 2026 (3) |
| Highly cited | No |