French Regulator AMF Supports Global Regulatory Rules for Decentralized Finance

French Financial Authority (Autorité des Marchés Financiers, AMF) has expressed its support for globally coordinated decentralized finance (DeFi) regulations.

The AMF is the regulator that issues licenses to crypto exchanges in France.

In a discussion paper published on Monday, the AMF shared "preliminary thinking on the regulatory issues" raised by the decentralized and "disintermediated" protocols that make up the DeFi ecosystem.

The AMF attempts to define DeFi, the decentralized governance system known as DAOs and the  automated "smart contracts" that operate transactions. The paper also sets out the associated  risk and levels of control for discussion.

According to the paper, "Due to the cross‐border nature and reach of DeFi activities, the AMF also supports the development of a global coordinated approach towards regulation to ensure a global level‐playing field, which should both aim to protect investors and foster innovation."

At a meeting with reporters in May, AMF Secretary General Benoit de Juvigny said the paper was a contribution to the development of EU DeFi policy.

Global standard-setters such as the Financial Stability Board (FSB) are also seeking to develop standards for DeFi. A working group of the international securities regulator IOSCO will issue recommendations by the end of this year.

"The AMF fully supports these initiatives, and intends to increase its engagement with stakeholders, both public and private, with a view to allow the emergence of a balanced regulatory framework that will help support the sound development of decentralized finance in the long run," the paper said.

While various jurisdictions are increasing regulation of centralized crypto exchanges, the DeFi protocol remains a regulatory challenge due to the apparent lack of specific entities to target for compliance.

The AMF invites industry stakeholders to contribute to its proposed discussion points by Sept. 30.

(Source: CoinDesk)