The AMF publishes the summary of responses received to its Discussion Paper on Decentralised Finance

The AMF’s work on Decentralised Finance

In June 2023, the AMF shared its preliminary thinking on the regulatory issues raised by new crypto-asset activities based on the use of automated, decentralised and disintermediated protocols that made up the emerging DeFi ecosystem. To this end, the AMF published a discussion paper which raised a number of points to help inform the regulatory debate on the subject, inviting stakeholders to share their comments in support of the discussion.

The AMF is publishing a summary of the numerous responses it has received, covering the various themes of the discussion paper, including criteria for a definition of DeFi, the nature of blockchain protocols, considerations on smart contracts, questions relating to the nature of open source code, risks of DeFi trading protocols, and governance issues.

Respondents overall showed support for the idea of developing a regulatory framework for DeFi, that would both enable the ecosystem to develop while adequately addressing the risks posed.

The AMF wishes to thank the respondents to its paper, and intends to continue the discussion with all stakeholders involved, with a view to supporting the emergence of a regulatory framework conducive to the balanced development of decentralised finance.

Regulatory considerations and follow-up work

The AMF wishes to remind that this publication is made in the context of broader regulatory work taking place on DeFi at several levels.

In France, the Autorité de Contrôle Prudentiel et de Résolution (ACPR) published a discussion paper on DeFi in 2023, and further discussions on legal considerations are also taking place under the leadership of the Haut Comité Juridique de Place (HCJP – the Legal High Committee for financial markets of Paris). In early 2024, the AMF and the ACPR also launched a joint initiative, under the patronage of the ACPR-AMF Fintech Forum, and in close collaboration with stakeholders and organisations representing the ecosystem in France, in order to explore the question of smart contract certification as a possible element of a future DeFi regulatory framework.

At the European level, following the entry into force of the MiCA regulation, the European Commission will produce a report on assessing the development of decentralised finance and of the appropriate regulatory treatment of decentralised crypto-asset systems, as well as an assessment of the necessity and feasibility of regulating decentralised finance.

At the international level, the International Organisation of Securities Commissions (IOSCO), of which the AMF is an active member, the Financial Stability Board (FSB), the Bank for International Settlements (BIS), and the Organisation for Economic Cooperation and Development (OECD) have also published reports providing considerations or recommendations on DeFi.