German financial auditor BaFin has called for regulation of the DeFi industry.
According to BaFin’s Birgit Rodolphe, while the DeFi sector is still relatively small, it could pose a serious threat to consumers if it becomes a serious competitor to the traditional financial sector.
The regulator stated that DeFi could not be placed in a better regulatory position compared to the traditional financial market.
BaFin stated that if cryptocurrencies suddenly disappear, users do not have a deposit protection and therefore a regulatory framework is necessary.
BaFin stressed that regulating the DeFi industry requires an all-European approach.
The great collapse of Terra, in particular, prompted regulators from all over the world to take action. US Treasury Secretary Yellen also said that stablecoins should be regulated.
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