A new report from the Bank for International Settlements (BIS) has stirred major controversy in the crypto industry. The report suggests that the growing risks of cryptocurrencies and decentralized finance (DeFi) call for stricter controls to protect the wider financial system. Many believe the BIS misunderstands the technology and say the report is misleading and dangerous. BIS Pushes for Tighter Rules as Crypto Connects with TradFi The BIS report is titled “Cryptocurrencies and decentralised finance: functions and financial stability implications.” It discussed how DeFi is becoming more connected to the traditional financial system. This happens through digital investment products like crypto exchange-traded funds (ETFs) and tokenized real-world assets. As crypto and TradFi mix, the BIS wants stronger rules to ensure problems in the crypto world do not spread into the wider economy. The BIS suggests creating stricter rules to prevent crypto problems from spreading to banks, companies, and regular people instead of calling for the outright ban of crypto. BIS Warns About Crypto Scams and User Safety The report pointed out many problems in the DeFi space. One big issue is that users often do not have enough information to know which projects are safe and which ones might be scams. Even though blockchain data is open to everyone, the BIS emphasized that many DeFi platforms can still confuse or trick users. The authors believe crypto’s transparency is not enough to protect users. The authors argued that just because DeFi uses open code does not mean it is safe. The report asserted that scammers have been able to trick users for long periods without getting caught. Since many crypto users and developers stay anonymous, bad behavior is harder to stop. The report suggests DeFi should be treated like traditional finance and follow the same rules because it offers similar services, like lending and trading. These include clear and honest information about products, know-your-customer (KYC) rules, and professional standards for platform operators. The goal is to avoid risks spreading from crypto into the broader economy. Crypto Leaders Strongly Disagree Many crypto industry leaders have criticized the BIS report. In a recent X post , Christopher Perkins, president of CoinFund, said the report is “dangerous” and shows a lack of understanding. He believes the open and clear nature of DeFi is better than traditional systems, which can be harder to understand. He disagreed with the idea that users are at a disadvantage in DeFi. Open-source code makes everything visible and reduces the risk of hidden problems. Curve founder Michael Egorov responded even more bluntly in an X post . His comments showed his strong rejection of the report’s suggestions. The post BIS Report Calls for Stricter DeFi Rules, Community Reacts appeared first on TheCoinrise.com .
