Financial Services Commission (FSC) Issues Consultation Paper On “Decentralised Finance” (DeFI)

The FSC has recently issued a consultation paper on DeFI which is in line with its transparent regulatory policy-making process. The primary objectives of the Consultation Paper are inter alia to: (i) address the nature, benefits and challenges of financial collaterals in the context of DeFI; and (ii) assess how the different forms of financial collaterals can accordingly be considered within the Mauritian regulatory system.

The application of DeFI may take various forms, including for example:

• Decentralised Autonomous Organisations (“DAOs”) - blockchain based organisations whose activities and decision-making are co-ordinated by self-executing codes, also known as smart-contracts.
• Decentralised exchanges (“DEXs”) – online platforms that allow for direct peer-to-peer trading of several virtual assets via automated market-makers (“AMMs").
• Decentralised lending – online platforms that enable the provision of credit facilities to businesses or the public on a peer-to-peer basis with no intermediaries involved.

Please contact us at [email protected] for more information.