ESMA Report Examines Risks and Benefits of Decentralized Finance for EU Market

European Securities and Markets Authority released article on risks and benefits of decentralized finance for EU market
Report highlights promised benefits like financial inclusion, innovative products, faster and cheaper transactions
But also significant risks like volatility, smart contract flaws, scams, lack of KYC, no recourse mechanism
Currently DeFi poses limited risks to financial stability due to small size and limited connections to traditional finance
ESMA pays close attention to crypto, recently released consultative paper on crypto asset regulations