Canada Bank called the risks and advantages of decentralized finance – Bits Media

The Central Bank of Canada published the results of a study of the decentralized finance market (DeFi), listing the advantages and related risks.

Canadian Central Bank experts described Defi as a multi -level structure, existing mainly based on Ethereum blockchain. The network is used to create services, related to the tokenization of assets and cryptocurrency lending services. IN 2020 the popularity of Defi began to grow, and this sector has become an integral part of the crypto economics. However, with 2022 the interest of users began to decline greatly due to the collapse of several large platforms, Including Terra, Celsius and FTX crypto -tank, Celebrated Canada Bank.

The main advantage of decentralized ecosystems of the Central Bank was called "component Defi", which allows services to interact with each other. Defi make it possible to freely provide financial services: Blockchain decentralized system reduces disagreements of the parties and expands the volume of financial services. Defi ecosystem also contributes to open competition. Thanks to open source code, developers can create their own products. Another advantage of Defi is transparency. The use of programmable smart contracts excludes intermediaries and increases the openness of the system.

In this case, the regulator indicated problems and risks, related to Defi, Marking: Despite innovation and opportunities, General economic benefits Defi remain limited. Central Bank listed the main problems, which the Defi sector is now facing. First of all, it is limited tokenization: Only tokenized assets can be recorded in the blockchain and interact with smart contracts. Now the share of tokenized real assets is small, Therefore, the contribution of tokenization to the real economy is still minimal.

Canada Bank noted frequently detected vulnerabilities in Defi projects, which leads to an increase in the number of hacks. Despite, that Defi seeks to eliminate centralized intermediaries, The need to manage closed keys complicates the participation of retail users in the Defi ecosystem. As a result, centralized, opaque and unregulated intermediaries, The so -called centralized finance platforms (CEFI). They also offer financial services using crypto assets, but differ from Defi topics, What people control them, not smart contracts. This subjects customer funds to risks due to the lack of transparency.

Researchers called on regulatory and legislative bodies to create guidelines for regulating Defi, which would develop innovations and protect users from risks.

According to a recent study by Canada Bank, for 2022 year, the share of cryptocurrency owners in the country has decreased 13,1% to 10%. In August, the Central Bank reported, that he does not see the need to start his own digital currency.