Dr. Arak Sutivong, the CEO of SCB 10X and the president of Siam Commercial Bank (SCB), has offered an insight into how one of the largest venture capital funds in Southeast Asia views the future of DeFi when it comes to the contentious question of regulation.<\/p>\n
SCB 10X is the venture arm of SCB, Thailand’s oldest bank, and mostly focuses on investing in blockchain-based financial services, such as DeFi and digital assets.\u00a0<\/p>\n
In his opening speech at SCB 10X\u2019s second annual global DeFi virtual summit, REDeFiNE, Dr. Sutivong stressed that by now, DeFi has broken through to the mainstream \u201cby many measures.\u201d In terms of growth, he noted that the sector had seen a ten-fold increase over the past six months, with over $100 billion in total value locked in the DeFi ecosystem this year. By many other metrics \u2013 including users, traded volume on exchanges and developed DApps \u2013 the sector, he said, has witnessed \u201ctremendous growth.\u201d\u00a0<\/p>\n
With all this development and excitement, however, Dr. Sutivong emphasized that several issues continue to loom over the nascent industry, observing that\u00a0“there are some concerning areas such as fraud that we keep hearing in the news. There has been a lot of concern from industry stakeholders and regulators.\u201d <\/strong>Tackling this over the medium- and long-term poses unique challenges, in his view, given that: <\/strong><\/p>\n \u201cDeFi, by definition, cannot be fully regulated. Instead, there needs to be a framework for how DeFi can be integrated with the rest of the financial ecosystem.\u201d<\/p><\/blockquote>\n Dr. Sutivong\u2019s remarks on sustainability and evolving approaches to regulatory compliance follow a series of interventions by global regulators and organizations, ranging from the proactive to the outright hostile.<\/p>\n Related: <\/strong>Bulls are back, but regulatory fears hamper the DeFi and altcoin recovery<\/strong><\/em><\/p>\n In early June, the World Economic Forum published a policy toolkit for DeFi, proposing ways to balance countervailing needs, such as fulfilling aspirations for decentralization and privacy, while mitigating illicit activities like money laundering. More specifically, the toolkit addressed concerns that new regulatory interventions could impose significant costs on DeFi startups, discouraging smaller participants from entering the market.<\/p>\n These concerns have been particularly acute for many DeFi developers unsure how the Financial Action Task Force\u2019s recommendations for regulating virtual asset service providers (VASPs) will affect them.\u00a0<\/p>\n In early June, Dan M. Berkovitz \u2013 commissioner of the United States Commodity Futures Trading Commission \u2013 stated he believed that DeFi derivatives platforms might contravene the country\u2019s Commodity Exchange Act and thus be illegal.<\/p>\n