Navigating The New Frontier: Supervising Digital Assets & Defi Training Course

Introduction

The burgeoning landscape of digital assets and Decentralized Finance (DeFi) presents unprecedented opportunities and unique supervisory challenges for financial regulators and central banks. This cutting-edge training course is specifically designed to equip professionals with the essential knowledge and emerging best practices for effectively supervising this rapidly evolving domain. Participants will gain a comprehensive understanding of the underlying technologies, inherent risks, and innovative supervisory approaches necessary to navigate the complexities of digital assets and DeFi protocols. Mastering the supervision of digital assets and DeFi is crucial for maintaining financial stability, protecting consumers, and fostering responsible innovation in this transformative space.

This intensive training course delves into the intricacies of the digital asset landscape, including cryptocurrencies, stablecoins, and non-fungible tokens (NFTs), as well as the architecture and operation of various DeFi protocols, such as decentralized exchanges, lending platforms, and yield farming mechanisms. We will explore the specific supervisory challenges related to anti-money laundering (AML), counter-terrorist financing (CFT), market integrity, consumer protection, and systemic risk within these novel ecosystems. Participants will learn about emerging best practices in regulatory frameworks, technological tools for supervision, and international efforts to address the unique characteristics of digital assets and DeFi.

Target Audience

• Central Bank Supervisors
• Financial Regulators
• Compliance Officers
• Risk Management Professionals
• Fintech Specialists
• Legal Professionals
• Professionals in Financial Intelligence Units (FIUs)

Course Objectives

• Gain a comprehensive understanding of the key concepts, technologies, and risks associated with digital assets, including cryptocurrencies, stablecoins, and NFTs.
• Understand the architecture, functionalities, and inherent risks of various Decentralized Finance (DeFi) protocols and applications.
• Identify the unique supervisory challenges posed by the decentralized and often borderless nature of digital assets and DeFi.
• Learn about emerging best practices and regulatory frameworks for supervising digital assets and DeFi at national and international levels.
• Develop strategies for addressing Anti-Money Laundering (AML) and Counter-Terrorist Financing (CFT) risks within the digital asset and DeFi space.
• Understand the market integrity concerns and potential for manipulation within digital asset markets and DeFi protocols.
• Learn about consumer protection issues and appropriate supervisory measures for digital asset and DeFi users.
• Analyze the potential systemic risks arising from the growth and interconnectedness of digital assets and DeFi with the traditional financial system.
• Explore technological tools and SupTech solutions that can assist in the supervision of digital assets and DeFi activities.
• Understand the evolving international standards and collaborations in the regulation and supervision of digital assets and DeFi.
• Learn about the specific supervisory considerations for different types of digital asset service providers (VASPs).
• Develop frameworks for assessing and managing the operational risks associated with DeFi protocols.
• Understand the implications of smart contracts and their auditability for supervisory purposes.

Duration

10 Days

Course content

Module 1: Introduction to Digital Assets: Concepts and Taxonomy

• Defining various types of digital assets: cryptocurrencies, stablecoins, NFTs, security tokens for your module.
• Understanding the underlying technologies: blockchain, cryptography, distributed ledgers.
• Exploring the evolution and market dynamics of the digital asset ecosystem.
• Identifying the key participants and their roles in the digital asset landscape.
• Analyzing the potential benefits and risks associated with different digital asset classes.

Module 2: Understanding Decentralized Finance (DeFi) Protocols

• Exploring the architecture and functionalities of key DeFi protocols: decentralized exchanges (DEXs), lending platforms, yield farming for your module.
• Understanding the role of smart contracts and oracles in DeFi operations.
• Analyzing the economic incentives and governance mechanisms within DeFi ecosystems.
• Identifying the inherent risks associated with DeFi protocols: smart contract vulnerabilities, impermanent loss, governance risks.
• Comparing and contrasting DeFi with traditional financial systems.

Module 3: Unique Supervisory Challenges of Digital Assets and DeFi

• Addressing the challenges of jurisdictional ambiguity and cross-border activities in supervising digital assets and DeFi for your module.
• Understanding the difficulties in identifying and verifying beneficial owners in decentralized environments.
• Analyzing the complexities of market surveillance and enforcement in the absence of traditional intermediaries.
• Exploring the challenges of regulating algorithmic and automated DeFi protocols.
• Addressing the rapid pace of innovation and the need for adaptive supervisory approaches.

Module 4: Emerging Regulatory Frameworks and Best Practices

• Examining evolving national regulatory frameworks for digital assets and DeFi across different jurisdictions for your module.
• Understanding the guidance and recommendations issued by international bodies (e.g., FATF, FSB).
• Analyzing emerging best practices in licensing and authorization of digital asset service providers (VASPs).
• Exploring sandbox initiatives and regulatory experiments for digital assets and DeFi.
• Discussing the potential for tailored regulatory approaches based on risk profiles.

Module 5: Anti-Money Laundering (AML) and Counter-Terrorist Financing (CFT) Supervision

• Understanding the specific AML/CFT risks associated with digital assets and DeFi transactions for your module.
• Applying the FATF Travel Rule and other AML/CFT requirements to VASPs and DeFi participants.
• Exploring technological solutions for AML/CFT compliance in decentralized environments.
• Addressing the challenges of transaction tracing and suspicious activity reporting in digital asset transfers.
• Analyzing the role of analytics and intelligence in combating illicit finance in the digital asset space.

Module 6: Supervising Market Integrity and Preventing Market Manipulation

• Identifying the potential for market manipulation, insider trading, and fraud in digital asset markets and DeFi protocols for your module.
• Adapting traditional market surveillance techniques to the unique characteristics of digital asset trading.
• Exploring on-chain analytics and forensic tools for detecting market abuse.
• Addressing the challenges of regulating decentralized exchanges and peer-to-peer trading platforms.
• Discussing the role of transparency and disclosure in promoting market integrity.

Module 7: Consumer Protection in the Digital Asset and DeFi Space

• Understanding the consumer protection risks associated with digital asset investments and DeFi participation for your module.
• Addressing issues related to misleading information, lack of investor education, and high-risk activities.
• Exploring appropriate disclosure requirements and investor warnings for digital asset products and services.
• Developing supervisory measures to ensure fair treatment of retail users in the digital asset and DeFi ecosystem.
• Analyzing dispute resolution mechanisms in decentralized environments.

Module 8: Assessing and Mitigating Systemic Risks from Digital Assets and DeFi

• Analyzing the potential for interconnectedness between the traditional financial system and the digital asset/DeFi space to create systemic risks for your module.
• Monitoring the growth and concentration of activity within key DeFi protocols and digital asset markets.
• Assessing the potential impact of stablecoin failures or major DeFi protocol collapses.
• Exploring macroprudential tools and supervisory measures to mitigate systemic risks.
• Understanding the role of central bank oversight in maintaining financial stability in the face of digital asset evolution.

Module 9: Technological Tools and SupTech for Digital Asset and DeFi Supervision

• Exploring various technological tools and platforms that can assist in the supervision of digital assets and DeFi activities for your module.
• Understanding the capabilities of blockchain analytics and forensic software.
• Analyzing the potential for using AI and machine learning for risk assessment and anomaly detection.
• Exploring the development of regulatory technology (RegTech) and supervisory technology (SupTech) solutions.
• Addressing the data privacy and security considerations when using technological tools for supervision.

Module 10: International Cooperation and Standards Development

• Examining the ongoing efforts of international bodies (e.g., G20, FSB, IMF) to develop global standards and guidance for digital asset regulation and supervision for your module.
• Understanding the importance of cross-border collaboration and information sharing among regulatory authorities.
• Analyzing the challenges of achieving international regulatory harmonization in the digital asset space.
• Exploring the role of international forums in fostering dialogue and knowledge exchange.
• Discussing the impact of divergent national regulations on the global digital asset ecosystem.

Module 11: Supervising Different Types of Digital Asset Service Providers (VASPs)

• Understanding the specific supervisory considerations for different categories of VASPs, including exchanges, custodians, and wallet providers for your module.
• Analyzing the risks associated with each type of VASP and tailoring supervisory approaches accordingly.
• Exploring licensing and registration requirements for VASPs in various jurisdictions.
• Addressing the challenges of supervising decentralized and non-custodial VASPs.
• Implementing risk-based supervision frameworks for the VASP sector.

Module 12: Assessing and Managing Operational Risks in DeFi Protocols

• Identifying the key operational risks associated with DeFi protocols, including smart contract vulnerabilities, oracle failures, and governance attacks for your module.
• Developing frameworks for assessing the resilience and security of DeFi platforms.
• Exploring the role of smart contract audits and formal verification in mitigating operational risks.
• Analyzing the challenges of incident response and recovery in decentralized environments.
• Discussing the potential for insurance and other risk transfer mechanisms in DeFi.

Module 13: Supervising Smart Contracts and Ensuring Auditability

• Understanding the architecture and functionality of smart contracts as the building blocks of many DeFi protocols for your module.
• Exploring the challenges of auditing and verifying the security and correctness of smart contract code.
• Analyzing the role of formal verification and other advanced auditing techniques.
• Addressing the issues of smart contract upgrades and governance changes from a supervisory perspective.
• Discussing the potential for regulatory sandboxes and experimentation with smart contract deployment.

Module 14: Case Studies in Digital Asset and DeFi Supervision

• Analyzing real-world case studies of regulatory actions and enforcement efforts in the digital asset and DeFi space for your module.
• Examining examples of innovative supervisory approaches adopted by different jurisdictions.
• Discussing lessons learned from past incidents and regulatory challenges.
• Exploring the impact of regulatory decisions on market development and innovation.
• Fostering discussion and knowledge sharing based on practical examples.

Module 15: The Future of Digital Asset and DeFi Supervision

• Discussing emerging trends and future developments in the digital asset and DeFi landscape and their potential implications for supervision for your module.
• Exploring the potential role of central bank-issued digital currencies (CBDCs) in the broader digital asset ecosystem.
• Analyzing the evolving relationship between traditional finance and decentralized finance.
• Considering the potential for greater convergence and regulatory harmonization in the future.
• Fostering strategic thinking about the long-term supervisory approaches for this dynamic sector.

Training Approach

This course will be delivered by our skilled trainers who have vast knowledge and experience as expert professionals in the fields. The course is taught in English and through a mix of theory, practical activities, group discussion and case studies. Course manuals and additional training materials will be provided to the participants upon completion of the training.

Tailor-Made Course

This course can also be tailor-made to meet organization requirement. For further inquiries, please contact us on: Email: info@skillsforafrica.org, training@skillsforafrica.org  Tel: +254 702 249 449

Training Venue

The training will be held at our Skills for Africa Training Institute Training Centre. We also offer training for a group at requested location all over the world. The course fee covers the course tuition, training materials, two break refreshments, and buffet lunch.

Visa application, travel expenses, airport transfers, dinners, accommodation, insurance, and other personal expenses are catered by the participant

Certification

Participants will be issued with Skills for Africa Training Institute certificate upon completion of this course.

Airport Pickup and Accommodation

Airport pickup and accommodation is arranged upon request. For booking contact our Training Coordinator through Email: info@skillsforafrica.org, training@skillsforafrica.org  Tel: +254 702 249 449

Terms of Payment: Unless otherwise agreed between the two parties’ payment of the course fee should be done 7 working days before commencement of the training.