V. Anantha Nageswaran, India’s Chief Economic Adviser, has cautioned about the dangers of crypto and decentralised financing, often known as ‘DeFi.’
The CEA underlined the necessity for a watchdog or centralised regulatory authority during an ASSOCHAM event, referring to various financial aspects of the Web3.
On DeFi and crypto, he agreed with RBI Deputy Governor T. Rabi Sankar that the current state of affairs is disturbing. He made his opinion clear that he believes that the current situation of financing in Web3 is more of a case of arbitrage than true financial innovation.
Nageswaran also made it plain that if cryptos are to be considered a viable alternative to fiat currency, it must meet a number of criteria.
He said, “It has to be a store of value, it has to have widespread acceptability, and it has to be a unit of account. In all these cases the new ‘innovations’ such as crypto or DeFi are yet to pass the test.”
What is DeFi?
The umbrella phrase “decentralised finance” (sometimes abbreviated as “DeFi”) refers to the provision of financial services via public blockchains, most notably Ethereum.
DeFi takes the essential concept underlying Bitcoin, the largest cryptocurrency by market capitalization, and develops it further, resulting in the establishment of a digital alternative to Wall Street that is free of the customary charges associated with such an alternative. It is feasible that this will lead to more open, free, and fair financial markets accessible to anybody with internet connection.
Users interact with DeFi most frequently through pieces of software known as “decentralised applications” (or “dapps”), the vast majority of which are currently implemented on the Ethereum blockchain.
In the case of DeFi, there is no need to fill out an application or open an account, in contrast to traditional banking institutions.
This news is republished from another source. You can check the original article here
Be the first to comment