Occasional paper on Decentralised Finance

João Almeida, João Alves, Carlos Bettencourt, Maria Bettencourt, Madalena Borges, Filipa Castilho, Sónia Correia, Gisela Fonseca, Mariana Júdice, André Leal, Afonso Marques, Carla Marques, Carlos Martins, Katja Neugebauer, Anaísa Oliveira, Céline Pereira, Joana Pratas, Leonor Queiró, Ricardo Sá, Joana Santos, Dina Teixeira, Pedro Tomés and Isabel Vasconcelos

Working Papers from Banco de Portugal, Economics and Research Department

Abstract: Decentralised Finance (DeFi) has gained significant attention in recent years. It aims to replicate the functions of the traditional financial system in a disintermediated way leveraging on the interplay between blockchain technology, smart contracts and stablecoins. This paper provides an overview of the underlying components of this relatively new ecosystem, as well as its associated risks from the perspective of a financial supervisory authority. While DeFi inherits the risks present in traditional finance, some of these risks could be amplified due to the lack of a clear regulatory framework and the intrinsic features of the DeFi space. Therefore, this paper also takes a closer look at the regulatory challenges involved, including the promise of self-regulation, and explores potential avenues for addressing these challenges without stifling the innovation that DeFi can foster.

JEL-codes: E42 G18 G19 O33 (search for similar items in EconPapers)
Date: 2024
New Economics Papers: this item is included in nep-pay
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://www.bportugal.pt/sites/default/files/documents/2024-08/OP202402_0.pdf

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:ptu:wpaper:o202402

Access Statistics for this paper

More papers in Working Papers from Banco de Portugal, Economics and Research Department Contact information at EDIRC.
Bibliographic data for series maintained by DEE-NTD ().