Lately, there have been diverse concerns regarding the Decentralized Finance industry from different financial organizations and authorities especially from those who are required to regulate the space.
Agustin Carstens, the General Secretary of the Bank for International Settlement (BIS), when speaking with Julianna Tatelbaum of CNBC News discussed the review of the quarterly report of the Bank for International Settlement as it has to do with the increasing concerns and risks that come with the Decentralized Finance space.
Particularly, Agustin Carstens mentioned the outbreak of financial intermediations that are independent of the banking sector and in his own opinion, DeFi is nothing but illusive given the conclusions drawn in from the pages of the quarterly report from the Bank.
When asked specifically if the DeFi space is troubling him, the BIS General Secretary said it is essential to visit the origin of Decentralized Finance and judge if the intended decentralization matches the expectation built around it.
Adding to his comment, he said what we have currently is not the real definition of true decentralization which means the decentralization itself is illusive. At some point, you still have a person or an agent playing an intermediary role without having the best interests of users and financial stability at heart.
Examining DeFi More Deeper
Based on his thoughts, Agustin Carsten believes it is important that we look deep into the concept of decentralization and see if the incentives promised are appropriate or not. The General Secretary of the Bank for International Settlement said that on their part, there are a whole lot of questions to be answered and authorities should not just be satisfied with the notion that if it is decentralized, it is safe.
“It is indeed safe in some aspects, but when considered from another perspective, it is not. And the fact that it is not safe in some aspects should not be taken lightly,” Carstens said.
More specifically, Julianna asked Agustin Carsten about the confusion and question that will come with the infiltration of government structures on Decentralized Finance which is not in alignment with the idea of decentralization in the first place.
Speaking on that, he said the issue is basically on the fact that government structures do exist, and DeFi enthusiasts want to believe it concealed.