The European Central Bank (ECB) has released a research report based on concerns about the crypto sector.
The report covered the environmental impacts of crypto, stablecoins and DeFi.
Ecological Problems
The strict attitude of the European Union authorities to the PoW algorithm has been on the agenda for a long time. Authorities support the crypto industry’s transition to the PoS consensus.
While it was stated that the assets using the PoW algorithm consume a lot of power, it was emphasized that there would be no inaction on the subject.
The report said that the carbon tax and the possibilities of a complete ban on mining will be considered.
DeFi Dilemma
The DeFi industry continues to attract the attention of the ECB. It was emphasized that Uniswap has a company-like structure and tokens are in the hands of a small number of people. Although DeFi is seen as “decentralized” according to the regulator, the truth is different.
The ECB continues to discuss a structure in which DeFi can be regulated.
Security and Sustainability of Stablecoins
Especially after the collapse of TerraUSD, stablecoins have become one of the most important agenda items of the regulators.
The ECB underlined that it has reached a point where even algorithmic stablecoins are considered safe even though they have no collateral.
Citing the Terra and UST events as an example, the ECB called for the urgent regulation of stablecoins so that a similar event does not happen again.
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