Cryptocurrencies are part of the world of decentralized finance, or DeFi. Part of the draw — and risks — of this ecosystem is just how unregulated it is. A new paper by law professor Hilary J. Allen suggests that some services and products within DeFi pose similar risks to “shadow banking” services, like subprime mortgages and credit default swaps, that set the stage for the 2008 financial crisis. Today, we’ll chat with Allen about her thoughts on why DeFi is the newest iteration of shadow banking.

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