In the December edition of its quarterly review of the economy and finance, the Bank for International Settlements (BIS) took aim at decentralized finance, calling the ambitions of its proponents unrealistic and expressing concern over its potentially destabilizing effect on markets. In a section titled “DeFi risks and the decentralisation illusion,” the BIS addresses the new movement, which seeks to overcome reliance on the traditional financial institutions that serve as mediators in most financial transactions. “There is a ‘decentralisation illusion’ in DeFi since the need for governance makes some level of centralisation inevitable and structural aspects of the system lead to a concentration of power,” reads the abstract of the section. “If DeFi were to become widespread, its vulnerabilities might undermine financial stability.” The review claims that the ambitions of DeFi’s most enthusiastic advocates for these automated systems to replace central regulation is an impossible ideal. “All DeFi platforms have …