The decentralized finance protocols (Defi) will survive government and corporate efforts to impose traditional financial regulations designed to create a walled garden of permits digital systems, according to Will Reeves, CEO and co -founder of Bitcoin (BTC) rewards the company’s fold.
Reeves told Cointelegraph that the regulatory proposals that require Defi protocols to embed the biometric identity controls within intelligent contracts, or other similar traditional financial regulations (Tradfi) will be counterproductive, as well as efforts to control the propagation of information on the Internet.
He also warned that governments and financial institutions inherited will use tradfi incentives to bring people to custody permission through traditional investment vehicles such as stock quoted funds (ETF), which have benefits on the maintenance of cryptography directly, including use as a guarantee for loans. Added:
“This is simply a chapter that will lead to an inevitable victory for these open networks. Over time, they will win, but on the way, you will see regulations and things destined to delay progress.”
The entrenched financial institutions are promoting regulations to stop innovation while positioning themselves to enter the cryptographic sector during the next decade, Reeves told Cointelegraph.
Despite this pressure, protecting open source software developers from legal responsibility remains the highest priority to protect financial protocols without centralization permits and regulatory overreach, he said.
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Financial institutions and governments enter the cryptographic world
As the inherited financial institutions continue to increase their presence in cryptography and demand a stricter government regulation on the sector, the defenders of privacy and financial sovereignty concern that the greatest scrutiny can undermine the central principles of cryptography and the defi.
Defi protocols promise to democratize finance and bankruptcy of non -banking, allowing anyone in the world a cell phone and an Internet connection to change value and risk through an open global financial system.
Force the controls of the credentials issued by the Government or impose other knowledge requirements (KYC) in the protocols defies the access without permission, decentralization and increases the risks of financial surveillance, critics say.
These risks would also cause crypto and defi to be indistinguishable from the inherited financial system that should be replaced, critics of these policies argue.
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