The Financial Stability Council (FSB), a financial regulator funded by the Bank for International Settlements (BIS), has promoted the international regulation of decentralized finance (Defi).

On February 16th, FSB released a report on the risk of financial stability of DEFI, focusing on the important system vulnerabilities, transmission channels and evolution of DEFI.

While DEFI brings a lot of "novel" services, it has "never been different" from traditional finance (TradFi) in performance, the agency said in its report. The FSB felt that Defi enhanced hidden system vulnerabilities based on some of its attempts to copy TradFi, mainly due to the use of new technologies, extremely high ecosystem interconnection and lack of regulation or compliance management.

In addition, the government claims that the level of specific government procurement processes in the DEFI system often runs counter to what the founders claim to be "quite serious".

To avoid the rapid growth of financial stability risks associated with debt defaults, the Financial Stability Board is working with standard-setting companies around the world to assess default controls in several jurisdictions.

FSB shows that an important factor to consider in this regard is the breakthrough for Defi customers, including relatively stable login passwords and a dense data encryption asset service platform, adding:

The FSB may consider whether allowing data encryption asset types and physical lines to accommodate the need for additional caution and investor protection, or increasing the implementation of current rules, can reduce the risks of closer interdependence.

The FSB focuses on the important role of stationary coding for assets like Tether (USDT) and stable coding for algorithms like DAI (DAI) in the Defi ecosystem because it takes place when selecting, clearing, buying and selling, borrowing, and using other data encryption assets. The rise of stable currencies will also increase retail and corporate customers' choice of Defi solutions and promote the use of data encrypted assets as a method of payment, according to the regulator.

"stable currencies are a key concern in terms of liquidity and maturity mismatch," FSB wrote. It focuses on the need to master the characteristics of different stable currencies to regulate their risk to the field of login passwords, including the Defi ecosystem.

The news comes at a time when regulators around the world will carry out increasingly stringent inspections of some of the most stable companies. Paxos Trust, a blockchain infrastructure service platform, announced on February 13th that it would stop issuing Binance licenses. (BU.S.) in an ongoing survey by UK regulators. Stable currency. The New York City Financial Services Center has ordered Paxos Trust to stop issuing dollars, claiming that the dollar is an unregistered security.