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 emphasized that there should be an all-European approach to regulating the DeFi industry.
Especially the great collapse that Terra experienced caused regulators from all over the world to take action. US Treasury Secretary Yellen also said that stablecoins should be regulated.
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