The US House Financial Services Committee met on September 10, 2024. The objective was to explore the depths of the DeFi market, which includes several elements, but at its core lies the elimination of the intermediaries. Both sides made their points, countering each other while listing the benefits that would work well for the unbanked population.
French Hill, chairman of the Republican subcommittee, stated that DeFi is here to change the structure of the traditional financial markets as well as its governance. Transactions are supported by automatically executed code and take place without the need for middlemen. Democratic Congressman Brad Sherman, one of the critics, pointed out that DeFi was a bad idea, adding that it is a major source for criminals to operate.
Sherman supported the counterargument with examples of malicious activities such as sanction evasions and tax evasions. Maxine Waters, a Democratic Congresswoman, bolstered the counterargument by bringing up the issue of fraudulent token promotion, citing an incident involving the Trump family’s World Liberty Financial DeFi project.
Amanda Tuminelli, the Chief Legal Officer of DeFi Education Fund, has supported the existence of DeFi by saying that it was a great way to allow people to access DeFi protocols. Amanda further stated that the Internet is all they want. They have hailed DeFi as a model that focuses on financial inclusion.
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Suffice it to say, US lawmakers are divided on the concept of DeFi. Topics such as tokenization and blockchain application are theoretically gaining traction. Innovative technology should set the pace to support future developments with a more concrete set of policies.
The hearing that happened on September 10, 2024, was titled Decoding DeFi: Breaking Down the Future of Decentralized Finance. It lasted for 2 and a half hours during which Republicans and Democrats left no stone unturned—both sides were hell-bent to prove their stand correct.
Some reports claim that there was also a reference to Justin Trudeau. A point was made highlighting that peer-to-peer transactions are the way of the future, and the Canadian PM cannot freeze someone’s bank account just for attending a protest. Critics continued to believe that it would serve as a base for billionaires to evade taxes.
That has not stopped developments from happening within the DeFi sphere. The most recent one pertains to the TON Foundation pumping $24 million into the DeFi initiative. The goal is to reward liquidity providers on two of TON’s protocols, namely STON.fi and DeDust.
HTX Ventures also made a move by investing in BSX to help build DeFi infrastructure on Base. It has been described as a strategic investment that will enable BSX Exchange to launch many new projects, such as earning products, spot aggregators, and staking products.
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It is worth noting that decisions regarding innovative technology are finally taking shape, as stated by both parties in the US House Financial Services Committee. The future will be influenced by the arguments of both parties, resulting in a significant victory for users.
