A US-based decentralized finance (DeFi) education fund has urged the UK’s Financial Conduct Authority (FCA) not to regulate developers of non-custodial protocols as intermediaries within its proposed cryptocurrency regulations. Non-custodial protocols are blockchain-based systems where users retain full control of their funds without interference from any central authority. The DeFi Education Fund argues that the nature of these protocols excludes them from traditional intermediary categories since their developers do not manage users’ funds directly. They warn that such regulations could hinder DeFi’s growth and undermine its principles of individual freedom and autonomy. This appeal comes at a time when the UK is considering stringent rules to regulate its cryptocurrency market to prevent financial fraud and money laundering. However, the DeFi sector cautions that overly strict regulations could stifle this revolutionary technology and contradict its core values. Decentralized finance has played a significant role worldwide in making financial services more transparent, accessible, and autonomous by enabling users to engage in loans, investments, and other financial interactions without traditional banking institutions. While the UK aims to protect the crypto market and consumer interests, experts emphasize the need for regulatory flexibility and a clear understanding of the technology to foster further development and establish a meaningful position within the global financial system.
Source: coindesk
