Decentralised Finance or ‘DeFi’ is the latest development in the crypto-asset space, and promises to replicate the traditional financial system in an open, decentralised, permissionless and autonomous way, through applications built mainly on the Ethereum blockchain network. The total value of crypto-assets locked in DeFi applications as of 31 March 2021 reached USD42.9bn up from USD1.9bn on 2 July 2020 (c. 2,150% increase, albeit from a very low base). The DeFi space is worth delving into due to its rapid growth within the volatile crypto-asset markets, use of leverage, and attraction of an increasing number of largely unprepared retail investors, exposing them to high risks. Also, as crypto- asset activity is increasingly becoming mainstream, the boundaries of the two systems become more porous. Increased interconnectedness of DeFi with traditional financial markets may give rise to potential risks of spillovers to the markets and the real economy. This session will discuss the evolution of DeFi and its mechanics with a view to better understand its activities, structures, potential benefits and underlying risks, as well as initial key considerations for policymakers in Asia and beyond.