Why institutions are hesitant about decentralized finance — Shibtoshi

Regulators should work with DeFi firms to craft sensible policies instead of “unnecessarily stringent rules,” Shibtoshi told Cointelegraph.

Shibtoshi, the founder of the SilentSwap privacy-preserving trading platform, outlined several concerns that make institutions hesitant to adopt decentralized finance (DeFi) solutions, including privacy, a lack of standardized compliance regulations, and legal accountability.

The DeFi founder told Cointelegraph that the high transparency of onchain transactions presents a problem for companies that must conceal sensitive information, including trading strategies, payroll information, and business-to-business agreements. Shibtoshi said:

Regulatory uncertainty continues to be one of the biggest problems for DeFi and is compounded by a fragmented approach across legal jurisdictions, which prevents institutional adoption, Shibtoshi added.

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