The financial game in the DeFi jungle is heading for a major shake-up, and guess who’s calling the shots?
The U.S. Treasury. They’ve just thrown the first punch with a public consultation, a fancy way of saying, we’re thinking about making digital IDs mandatory in the DeFi world.
Maybe they didn’t get the memo about the word ’decentralized’.
Red flags
Back in the day, DeFi was the no man’s land, no sheriffs, no badges.
But the Treasury’s new play, under something they call the GENIUS Act, wants to slap digital identity checks right into those smart contracts we all know and love.
They’re talking APIs for automatic KYC and AML checks and even biometrics. Imagine having your fingerprint or face scan as your financial passport in the crypto-sphere!
The consultation stays open until October 17, 2025, and trust me, everyone’s watching.
Now, why the fuss? Total control, that’s why. Stablecoins are under the spotlight.
Banking groups have been waving red flags, warning about a potential $6.6 trillion flood out of traditional bank deposits.
That’s right, trillion with a T. The Treasury’s listening because ignoring that risk is like ignoring a tiger in your living room.
Banks rule
Big names in DeFi like Uniswap, Aave, and Lido haven’t spoken up yet, keeping the poker face strong.
But the crypto community? They’re wide awake, eyes peeled for any regulatory moves that might change the game.
The big banks? They’re pushing for tighter rules, and the Treasury seems ready to play ball.
More regulations
Oh, and Ethereum? It’s doing its thing too, holding steady. It’s the backbone of most DeFi action, and whatever shakes happen here will ripple through the whole crypto ecosystem.
So, what’s the new normal? Expect regulations dressed up in futuristic tech, biometrics cutting down compliance headaches, clearer rules to keep stablecoins from running wild, and a possible makeover of DeFi’s unruly vibes.
It’s a journey from chaos to order, with the Treasury leading this charge.
Disclosure:This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.
Kriptoworld.com accepts no liability for any errors in the articles or for any financial loss resulting from incorrect information.
Cryptocurrency and Web3 expert, founder of Kriptoworld
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With years of experience covering the blockchain space, András delivers insightful reporting on DeFi, tokenization, altcoins, and crypto regulations shaping the digital economy.
📅 Published: August 19, 2025 • 🕓 Last updated: August 19, 2025
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