According to recent data from the crypto firm Ripple, decentralized finance (DeFi) will progress significantly in 2024. Progress which, according to the company’s projections, will be closely linked to the expansion of compliance standards in this key segment of the crypto industry.
Compliance as a growth engine for DeFi according to crypto firm Ripple
In its latest report, crypto firm Ripple supports the idea that compliance is potentially the biggest breakthrough decentralized finance (DeFi) will see in 2024. The company reaffirmed this opinion as part of the Singapore Fintech Festival.
During this event, Ripple shared some key lessons about compliance. Namely the need for standardized definitions within DeFi regarding the integration of compliance protocols into smart contracts. But also the improvement of data exchange mechanisms between regulatory frameworks.
Crypto company Ripple has highlighted proactive measures taken by major regulators. In this case the International Organization of Securities Commissions (IOSCO) and the Monetary Authority of Singapore (MAS). These have already started preliminary discussions on the regulation of DeFi.
Experts agree that the year 2024 is extremely promising for DeFi. This is largely due to the tokenization of real-world assets and mainstream acceptance of blockchain technology and cryptos.
Thanks to accelerating regulatory efforts?
It should be noted that one of the main concerns raised during the event was the inherent risk of regulatory arbitrage posed by the cross-border nature of DeFi. Participants unanimously stressed the importance of adopting a proactive approach to compliance. This, by emphasizing the concept of “compliance by design” to meet this challenge.
For Monica Long, CEO of crypto company Ripple, the groundwork by regulators indicates that compliance will emerge as the foundation of DeFi’s evolution in 2024. As is the growing consensus within the industry
The official believes that sustained pioneering compliance measures specifically tailored to DeFi will open up new possibilities and further integrate blockchain technology into traditional financial systems.
Amid these discussions, another important development took place. The XRP Ledger has successfully implemented an amendment introducing automated market maker (AMM) capabilities. A step marking a significant advancement for DeFi by providing users with increased liquidity and trading opportunities.
Maximize your Tremplin.io experience with our ‘Read to Earn’ program! For every article you read, earn points and access exclusive rewards. Sign up now and start earning benefits.
