Rep. Warren Davidson Introduces The Evaluating DeFi Opportunities Ac

WASHINGTON, D.C.- Rep. Warren Davidson (R-OH) today introduced the Evaluating DeFi Opportunities Act. This legislation requires the Securities and Exchange Commission, Commodity Futures Trading Commission, and the Secretary of the Treasury to jointly produce a study on decentralized finance.

"Decentralized finance is essential to the future of capital markets. Sadly, the Biden-Harris administration is trying to regulated DeFi out of existence without understanding the risks or benefits," said Rep. Davidson (R-OH). "This legislation guarantees that data-driven financial regulations could be implemented by the federal government without interfering with the development of digital markets or jeopardizing the user privacy that DeFi provides."

Background:

• DeFi has grown dramatically in the past four years as more Americans have become more sensitive about their financial privacy. With a fast and growing increase in users, the DeFi market's total capitalization is now estimated at approximately $75 billion dollars.

• Despite the growth and the benefits it has brought, DeFi is facing significant challenges. The Biden-Harris Administration has been actively working to overregulate the industry, particularly by targeting the self-custody by proposing substantive information-collecting requirements on DeFi protocol developers.

• These unworkable requirements would essentially do away with the DeFi market in the United States by dis-incentivizing innovators and driving investment overseas. Its imperative that regulators understand the benefits and take a carefully measured approach towards regulating this nascent industry.

• This study will help explore, develop, and ensure we understand DeFi better tomorrow than we did today. The benefits of decentralized finance include:
  • Operational resilience and availability of blockchain systems.
  • Interoperability of blockchain systems.
  • Market competition and innovation.
  • Transaction efficiency.
  • Privacy of user data.
  • Affordability for users.