The Thailand Securities and Exchange Commission is seeking to regulate the decentralized finance (DeFi) space as activities pick up in the country.
Thai SEC wants to regulate the DeFi sector
Financial regulators in various parts of the world have cast their glances towards the cryptocurrency space as the market grows. The DeFi sector is one of the fastest-growing areas in the cryptocurrency industry, and the Thai SEC wants to regulate it.
According to the Bangkok Post, the SEC is seeking to regulate the DeFi space following the launch of the DeFi farming platform Tuktuk Finance. Tuktuk launched on Bitkub Chain during the weekend, with the price rising to several hundred US dollars before declining to $1 within a few minutes.
Although the SEC wants to regulate the DeFi sector, it is unclear which regulatory agency would oversee DeFi transactions in Thailand. “The issuance of digital tokens must be authorized and overseen by the Securities and Exchange Commission, and the issuer is required to disclose information and offer the coins through the token portals licensed under the Digital Asset Decree,” the SEC added.
How enforceable are regulations in censorship-resistant environments?
While the Thai SEC and several regulatory agencies worldwide have discussed the need to regulate the DeFi sector, it is unclear how they intend to do so. One of the key problems is how to enforce regulations in censorship-resistant environments.
DeFi and other decentralized sectors were designed solely to avoid censorship from governments and control from single entities. Hence, making it tough for the government to regulate the DeFi space. DeFi projects have become popular, with decentralized lending and borrowing providing better deals for users via smart contracts instead of using intermediaries like the traditional financial firms.
Central banks have also started looking into regulating the cryptocurrency market. Several central bank heads have talked about the need to regulate the growing market. Stefan Ingves, the governor of Riksbank — Sweden’s central bank, is the latest to weigh in on the matter. According to Ingves, the size of the cryptocurrency means that it needs to be regulated. He believes that since consumer interests and money laundering are now in play, the regulation of the market would happen.