Regulators around the world are increasingly concerned about the control of blockchain and DeFi. The reason ? These solutions would be used to circumvent the regulations in force in the countries, and would encourage tax offenses. What the European authorities want to put an end to. They have been working for several months to put in place strong regulatory measures to better monitor these innovations.
Collect crypto transaction information in real time
The European Commission (EU) wants to investigate DeFi activity on the Ethereum blockchain. She has it let it be known in a document published last week, and launched a call for tenders to carry out the operation. The objective is to collect data to develop, deploy and test a technological solution for the integrated supervision of decentralized finance, in real time. This, on behalf of the regulators of the region.
This project is part of efforts to draw a regulatory framework for the crypto sector. Once the contractor is selected, the implementation of the project will take the form of a pilot project.
The EU explains that the choice of Ethereum is explained by the fact that most DeFi applications are built on this blockchain. Eventually, the tool will be able to adequately track trading activity on DeFi apps. Among the most popular applications is Uniswap, a decentralized exchange (DEX). This platform makes it possible to trade cryptos without providing personal information to an intermediary.
If the EU is able to get the information it needs directly from public blockchain data, it could reduce the reporting burden on crypto service providers, said Patrick Hansen, director of European policy at Circle.
Like several major jurisdictions around the world, the EU keeps a close eye on the crypto world. One of its main goals is to monitor crypto financial operations to strengthen its tax base. Europe also wants to fight more effectively against the tax offenses that the blockchain promotes.
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