| ESMA assesses market developments in DeFi and explores the smart contracts system
October 11, 2023--The European Securities and Markets Authority (ESMA), the EU's financial markets and securities regulator, today publishes two articles on decentralised finance (DeFi), one on developments and risks in the EU market and another on a methodology for the categorisation of smart contracts. These articles highlight important risks to consumers, new forms of market abuse, and possible vulnerabilities to financial stability.
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| DeFi: developments and risks in the EU market The article on DeFi developments and risks in the EU shows that DeFi raises serious risks to investor protection, because of the highly speculative nature of many DeFi arrangements and important operational and security vulnerabilities. Risks to financial stability are not meaningful at this point owing to DeFi’s small size but require monitoring. In addition, DeFi's unique features have led to new market manipulation issues that need to be addressed. |
| ESAs warn of risks from economic and geopolitical events September 10, 2024--The three European Supervisory Authorities (EBA, EIOPA and ESMA-ESAs) today issued their Autumn 2024 Joint Committee Report on risks and vulnerabilities in the EU financial system. The Report underlines ongoing high economic and geopolitical uncertainties. |