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Banco de Portugal published a paper that provides an overview of the underlying components of the decentralized finance (DeFi) ecosystem, as well as its associated risks from the perspective of a financial supervisory authority. While DeFi inherits the risks present in traditional finance, some of these risks could be amplified due to the lack of a clear regulatory framework and the intrinsic features of the DeFi space. Therefore, this paper also takes a closer look at the regulatory challenges involved, including the promise of self-regulation, and explores potential avenues for addressing these challenges without stifling the innovation that DeFi can foster.

The Banco Central do Brasil's Lift Challenge Real Digital has chosen nine partners to help develop a digital real, Brazil's central bank digital currency (CBDC). They received 47 project proposals from Brazil, Germany, the U.S., Israel, Mexico, Portugal, the U.K. and Sweden. An implementation phase for the selected projects will begin on March 28 and last until July 27, with an eye towards launching a pilot in 2022 and introducing a final version in 2024.