Arak Sutivong, CEO of SCB 10X and the president of Siam Commercial Banking concern (SCB), has offered an insight into how one of the largest venture capital funds in Southeast Asia views the future of decentralized finance (DeFi) when it comes to the contentious question of regulation.

SCB 10X is the venture arm of SCB, Thailand'due south oldest banking concern, and generally focuses on investing in blockchain-based financial services, such as DeFi and digital avails.

In his opening oral communication at SCB 10X'due south second annual global DeFi virtual summit, REDeFiNE, Sutivong stressed that by at present, DeFi had broken through to the mainstream "by many measures." In terms of growth, he noted that the sector had seen a tenfold increase over the past six months, with over $100 billion in total value locked in the DeFi ecosystem this year. By many other metrics — including users, traded volume on exchanges and developed decentralized applications — the sector, he said, has witnessed "tremendous growth."

With all this development and excitement, however, Sutivong emphasized that several issues go on to loom over the nascent industry, observing that "there are some concerning areas such as fraud that we keep hearing in the news. There has been a lot of business concern from industry stakeholders and regulators." Tackling this over the medium- and long-term poses unique challenges, in his view, given that:

"DeFi, by definition, cannot be fully regulated. Instead, in that location needs to be a framework for how DeFi can exist integrated with the residuum of the financial ecosystem."

Sutivong's remarks on sustainability and evolving approaches to regulatory compliance follow a series of interventions by global regulators and organizations, ranging from the proactive to the outright hostile.

Related: Bulls are back, but regulatory fears hamper the DeFi and altcoin recovery

In early June, the World Economic Forum published a policy toolkit for DeFi, proposing ways to balance countervailing needs, such as fulfilling aspirations for decentralization and privacy, while mitigating illicit activities such as money laundering. More specifically, the toolkit addressed concerns that new regulatory interventions could impose significant costs on DeFi startups, discouraging smaller participants from entering the marketplace.

These concerns accept been peculiarly acute for many DeFi developers who are unsure about how the Financial Action Task Force'due south recommendations for regulating virtual asset service providers volition affect them.

In early June, Dan M. Berkovitz, commissioner of the United States Commodity Futures Trading Commission, stated he believes that DeFi derivatives platforms might contravene the country's Commodity Exchange Human action and thus exist illegal.