Cryptocurrency and the Law: The Challenges of Regulating Decentralized Finance in Global Markets
Keywords:
Cryptocurrency, Decentralized Finance (DeFi), Blockchain, , Global Regulation, Legal FrameworksAbstract
This research explores the challenges of regulating cryptocurrency and Decentralized Finance (DeFi) in global markets, highlighting the inadequacies of traditional legal frameworks in governing decentralized financial systems. As cryptocurrencies operate on blockchain technology without intermediaries, regulatory authorities face difficulties in enforcing anti-money laundering (AML) laws, ensuring consumer protection, and managing cross-border transactions. The study identifies key legal challenges, such as the fragmentation of regulations across jurisdictions and the inability of current laws to address the decentralized and pseudonymous nature of blockchain. Recommendations for global regulatory improvements include the development of adaptive, technology-neutral policies, the establishment of international collaboration to create standardized global regulations, and the use of regulatory sandboxes to support innovation while ensuring legal compliance. Future research should focus on the socio-economic impacts of DeFi regulations, exploring their effects on financial inclusion, innovation, and global financial stability. This study contributes to the understanding of how policymakers can balance innovation and regulation in the evolving landscape of decentralized finance.
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Copyright (c) 2024 Abdul Rasyid, Andre Prasetya Willim, Siti Khaeryyah
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