August 2025
By Adriana Ennab, Executive in Residence, Global Digital Finance
Summary of Key Outcomes
The roundtable 'Shaping the Future of DeFi – Global Standards, Security, and Innovation in Public Blockchain Infrastructure' brought together regulators, developers, and institutional stakeholders to examine how decentralised finance (DeFi) can be safely integrated into the global financial system. With DeFi revenue projected to reach $232 billion by 2030, and regulatory bodies such as IOSCO and the EU (via MiCA) issuing guidance on its oversight, these discussions are no longer theoretical but pivotal.
DeFi delivers financial services—trading, lending, clearing, settlement—through code-based protocols that run without traditional intermediaries. This disintermediation creates both transparency and complexity: benefits like real-time settlement and composability exist alongside risks like oracle manipulation, smart contract vulnerabilities, and regulatory arbitrage. The roundtable explored whether frameworks grounded in 'same activity, same risk, same regulation' can realistically be applied to decentralised systems, and what innovations in policy or infrastructure might be needed to bridge the gap.
This summary captures five core outcomes and proposals for shaping DeFi’s regulatory future.
1. Regulation should focus on outcomes, not identical rules
Regulators should pursue equivalent regulatory outcomes—such as transparency, security, and market integrity—without insisting on identical rules. Rather than retrofitting traditional finance regulation onto DeFi, speakers proposed targeting activities and associated risks. This ‘same risk, same outcome’ model encourages DeFi’s innovation to thrive while maintaining essential safeguards.
One speaker noted that attempts to fit DeFi into conventional definitions have proven unproductive, saying, “Instead of endlessly debating what is or is not ‘true decentralisation’, we should ask whether participants are protected, and the system is stable.”
Figure 1: Regulatory Approaches to DeFi
Data Sources: Bank for International Settlements(BIS), IOSCO, OECD & EU Commission
2. Technology-neutral and risk-based frameworks are essential
A strong consensus emerged that regulatory responses must be technology-neutral. That is, regulations should not depend on whether a service is delivered through centralised or decentralised infrastructure, but whether it introduces specific risks.
Tools such as smart contract certification, verifiable credentials, and embedded supervision were highlighted as promising mechanisms to support compliance without intermediaries. As one participant remarked, “Regulation should protect outcomes—not punish architecture.”
3. Move beyond sandboxes: foster live experimentation
While sandbox environments and proof-of-concept trials remain valuable, several contributors challenged their overuse, arguing that the DeFi ecosystem must advance to real-world testing. “We need to stop simulating and start doing,” said one participant. Another emphasised, “The sandbox label is increasingly meaningless—we need to engage in live, licensed experimentation that informs policy through practice.”
Participants encouraged stronger partnerships between regulators and developers to co-design supervisory frameworks in production environments.
4. Promote industry-led standards and voluntary compliance
In the absence of formal regulation, DeFi communities were urged to develop and publicise internal rules and best practices. Examples included transparent protocol governance, smart contract audits, and MEV mitigation disclosures. One proposal likened this to market infrastructure rulebooks—clear, community-driven norms to encourage safe participation. Voluntary certification schemes and institutional DeFi frameworks were also cited as vital steps towards regulatory confidence.
5. Institutional DeFi demands fit-for-purpose safeguards
Speakers stressed that decentralisation does not equate to deregulation. Instead, DeFi should offer credible paths to compliance—particularly for institutional actors. Programmable compliance, non-custodial infrastructure, and permissioned DeFi pools were cited as early signs that institutional-grade DeFi is achievable.
“The same protocols that enable retail experimentation can be adapted to meet institutional standards,” one participant noted, adding that bridging this gap requires technical clarity and regulatory trust.
Looking Ahead
Participants converged on the importance of pragmatic collaboration. Rather than waiting for universal definitions or perfect regulation, the community should act now to test, refine, and scale compliance solutions. Building on insights from Bank for International Settlements ’s DeFi stack and IOSCO’s 2023 recommendations, the conversation pointed to the need for real-world experimentation—not just sandbox pilots but licensed, supervised activity. DeFi's architecture may be novel, but the policy goals are familiar: market integrity, investor protection, and systemic resilience. Proposed next steps included launching hybrid regulatory pilots, exploring scalable smart contract certification, and formalising voluntary governance standards. As one speaker summarised, “This is not about rejecting regulation—it’s about rethinking how regulation happens in an automated, decentralised world.”
Supplementary Figures
Figure 2: Balancing Innovation and Compliance in DeFi
Source: Synthesised from roundtable themes and industry trends
| Region | Regulatory Clarity | Regulatory Experimentation | Institutional DefFi Pilots |
| EU | High | High | Medium |
| US | Medium | Low | High |
| Singapore | High | High | High |
| UK | Medium | Medium | Medium |
Figure 3: Global Readiness for DeFi Regulation (Descriptive Scale)
Source: Public policy initiatives and ecosystem engagement assessments (2024–2025)