South Korean Government highlights positive capabilities of DeFi

South Korean Government devotes the majority of its report to DeFi
  • The South Korean government has recently published a report titled: Research on Innovative Blockchain-Based Financial Ecosystem 
  • The report is based on a study conducted by Block Media and Chain Partners in collaboration
  • It suggests that DeFi intends to establish a financial system in the format of P2P (peer-to-peer)

The Korean government has recently published a report in association with two mainstream institutions. While the first is the Ministry of Science and ICT, the other is the quasi-governmental organization: the Korea Internet & Security Agency (KISA). 

Called the Research on Innovative Blockchain-Based Financial Ecosystem, the report counts for 245 pages in total where the majority of them are devoted to the explanation of decentralized finance (DeFi).

A joint study of Block Media and Chain Partners

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The report is based on a study conducted by Block Media and Chain Partners in collaboration. This respective study was developed from the sources of a KISA research project. However, it does not account for the official voice of the Korean government.

The report suggests that DeFi intends to establish a financial system in the format of P2P (peer-to-peer). It aims to remove the function of central institutions or intermediaries. 

The system will be then based on smart contracts of blockchain technology. Meanwhile, it will probably spread to various financial sectors like investment, insurance, and so on.

The DeFi market was made to facilitate everyone with easy access to financial services for example loans, and investments without unrequited intermediates. 

DeFi’s current highlights

Meanwhile, DeFi has the potential to replace most of the functions of conventional financial institutions. Though it carries on to be in weak demand for people’s requirements today, DeFi is gaining a lot of profit and interest, mainly because of its positive utility value for investment purposes.

The respective report also highlights certain DeFi projects like AAVE, COMP, SUSHI, etc. Further, it specifies affiliated institutions such as the digital currency fund Pantera Capital and the blockchain investment firm Hashed.

A crypto assets industry summit “V20” was held on November 2020. after the discussions and debates, it was concluded that DeFi demands a fresh regulatory approach.

DeFi is mostly immune from the target spots of regulators. It can easily be availed with KYC. Thus, the governments and international regulations regulate it in terms of fraud, etc. The DeFi surge of last summer was highlighted as a temporary bubble. It happened due to the consequential overflow of funds from the sector.

Thus, it will be interesting to observe how the crypto market responds to the respective report from the official authorities.

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Ritika Sharma
Ritika Kumari Sharma is an Economics Honors graduate from the University of Calcutta. She is completely into finance and believes that cryptocurrencies are the future. She is an enthusiast learner about the cryptocurrency and blockchain technology.

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