EU Regulators Target DeFi Gateways, Not Protocols

The European Securities and Markets Authority (ESMA) has proposed regulating gateways into decentralized finance (DeFi), rather than the DeFi protocols themselves. This move could transform access to DeFi, boosting compliance and institutional adoption of crypto.

According to ESMA's MiCA review response, a new regulated crypto-asset service would be created for firms that give customers access to DeFi protocols. This shift in regulation aims to place the burden of regulatory and security requirements onto intermediaries and gateway providers.

The proposal has the potential to boost compliance and institutional adoption of crypto, but its impact on DeFi users remains uncertain. The EU's approach to regulating gateways could set a precedent for other regions, influencing the future of DeFi globally.