The World Economic Forum recommended using regulatory sandboxes to foster decentralized finance innovation while mitigating risks.
The World Economic Forum (WEF) urged policymakers and regulators worldwide to conduct decentralized finance (DeFi)-related innovations and experiments within regulatory sandboxes, focusing on tailored risk mitigation and transparency.
In its recent assessment of nine major economies, including the United States, the United Kingdom, Japan and the United Arab Emirates, the WEF identified the need for a tailored approach to regulating the DeFi ecosystem.
The report recommended using sandboxes to keep DeFi investments within regulatory frameworks, allowing for controlled experimentation while managing associated risks and ensuring transparency.
