Speaking to CNBC news’, Julianna Tatelbaum, BIS General Secretary Agustin Carstens, discussed the Bank for International Settlement’s quarterly review [PDF] on top of the growing risks and concerns around DeFi. In particular, Carstens discussed the “break of the manifestation of non-bank financial intermediation” and the fact that he considered DeFi as “illusive,” thus giving it a section within the quarterly report. Questioned on what in particular troubled him about DeFi, the General Secretary responded: He added:
DeFi under the microscope
As a result, Carstens noted that it’s critical to dig deep into the concept of decentralized finance to determine whether or not the incentives are appropriate. The BIS General Secretary indicated that they had discovered some issues that are cause for concern, and it’s critical that authorities don’t become complacent with the notion that just because something is decentralized, it’s safe. Specifically, Carstens was asked about the conundrum that occurs when you begin to impose governance structures on DeFi, which seems to be at odds with the very concept of a decentralized system in the first place. On the subject, he stated that the illusion is precisely that the government structure exists; it is concealed; it is not visible; and at the end of the day, those who facilitate transactions are present, sometimes with ambiguous incentives.
