A manager at the Bank for International Settlements (BIS), Benoît Cœuré, says that crypto is “growing very quickly” and “becoming mainstream in different ways”. Stressing that decentralized funding (defi) was a “wake-up call” for financial regulators, he said countries “will likely agree on a global framework for crypto next year”.
BIS commissioner sees Defi as a wake-up call for regulators, global politics are expected next year
Benoît Cœuré, member of the BIS Executive Committee and currently Head of the BIS Innovation Hub, spoke about cryptocurrency, global regulation and decentralized finance (defi) last week.
Cœuré was a member of the Executive Board of the European Central Bank (ECB) and before joining the ECB held various positions at the French Ministry of Finance and the French Debt Management Office. He announced on Thursday that he had been appointed head of the French competition authority.
The head of the BIS Innovation Hub told the Financial Times that regulators around the world have intensified their discussions on high-level global guidelines for cryptocurrency and decentralized finance. The publication conveyed:
Financial regulators are likely to agree on a global framework for crypto in the next year after the rapid growth of decentralized finance gave them a “wake up call”.
The BIS executive noted that regulators can no longer ignore the deficit, citing that it “opens up new avenues. . . for networking with traditional finance, which potentially creates new forms of systemic risk. “
Regarding global regulation, Cœuré suggested that the Financial Stability Board (FSB) would be the most appropriate platform for regulators worldwide to agree on a unified framework, noting that it could be done in 2022, when to take new action, which means that “we are probably at least two or three years away from having a stable landscape around the world.” The BIS manager described:
The risk in 2022 is that large jurisdictions – [like] Europe, UK, USA, [and] China – keep moving, but in other ways and producing a system that is globally inconsistent.
Cœuré indicated that countries with different approaches to cryptocurrencies would create opportunities for “regulatory arbitrage” that would enable companies and individuals to take advantage of gaming authorities by choosing the most convenient locations to do business. He added, “This is a risk that should be avoided and there is still time to avoid it.” Speaking of crypto, the BIS manager said last week:
Now that it’s growing and really really fast. . . become mainstream in different ways, then the time has certainly come for rigorous regulation.
What do you think of Benoît Cœuré’s comments? Let us know in the comment section below.
Photo credits: Shutterstock, Pixabay, Wiki Commons
Source: Crypto News Austria