FSB outlines crypto and defi risks to financial stability
Future work will map “oracles”, “bridges” and other links with traditional finance
The Financial Stability Board released on February 16 reports that map out the risks stemming from decentralised finance (defi) and crypto.
While the way in which defi provides services is novel, the functions are not, the FSB said. In trying to replicate the financial system, defi “inherits and may amplify” liquidity and maturity mismatches, leverage, interconnectedness and operational vulnerabilities well known to traditional finance.
Crypto market capitalisation grew to $2.6 trillion in
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