On Oct. 12, the Autorité de Contrôle Prudentiel et de Résolution (ACPR), part of the French Central Bank, published a summary of its public consultation on a regulatory framework for decentralized finance (DeFi).
The public consultation lasted two months, from April to May 2023, in response to the initial paper discussing possible regulations for DeFi in the country. External contributions nudged the ACPR to surprising revelations, especially regarding the structural persistence of centralization patterns:
“The ACPR therefore believes that the term ‘disintermediated’ finance is more appropriate than that of ‘decentralized’ finance.”
The operational risk of this “paradoxical high degree of concentration” in DeFi concerns the physical infrastructure hosting blockchain nodes, in which cloud service providers play a central role.
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According to the summary, the “vast majority” of respondents advocate that DeFi should continue to be deployed on public blockchains rather than on private or permissioned ones. However, they admit that these blockchains need to be audited on a regular basis. Proposals to regulate intermediaries and certify smart contracts were…
