Monday, January 24

BIS calls for orchestrated regulation against cryptocurrencies

Benoît Cœuré, Director of the BIS Innovation Center, said the rapid growth of the decentralized finance (DeFi) sector is a wake-up call for regulators to band together to create global laws on cryptocurrencies. His speeches were published by Future Times.

His speech takes place a few days after the International Monetary Fund (IMF) showed the same concern, especially about emerging countries, and indicated the same decision-making process. This indicates that governments will have greater pressure from these bodies in 2022.

With Bitcoin becoming a $1 trillion asset this year and carrying with it several other coins, whose added value also crosses the trillion mark, this is scaring big gamers. Despite this, it seems that it is now too late to try to stop this innovation.

globalization or decentralization

Although many aspects of our lives are shaped by decisions made by centralized entities, it is important to remember that every government, and every country, has its own opinion on many issues, including cryptocurrencies.

While China has banned all activities linked to cryptocurrencies, for example, El Salvador has made Bitcoin (BTC) its legal currency, while other countries so far are letting their citizens make their own choices.

Despite this, this divergence of views is bothering big names in the financial sector, such as some Central Banks, the IMF and the BIS, responsible for overseeing banks.

“The risk in 2022 is that large jurisdictions — Europe, UK, US, China — will continue to move forward, but on different paths and produce a system that is globally inconsistent.”

In addition, Benoît Cœuré also expressed concern about the rapid growth of the DeFi sector, which he said poses great risks to the world economy, which policymakers cannot ignore.

Now it’s too late

Before working at the BIS, Benoît Cœuré worked as an adviser to the European Central Bank (ECB) between 2011 and 2019. Despite this, like his colleagues, he must have cared little for a ‘currency created by nerds’, after all it would have no adoption .

But more than ten years later, they all seem to be preoccupied with the evolution of money, taking away the government’s power over it.

“But now that this is really growing very fast and becoming popular in different ways, it’s certainly time for consistent regulation.”

Perhaps governments could kill bitcoin in its infancy, but now it seems too late. In addition to it, there are countless other projects, nudging different sectors, such as banking, games and art, so that they can be modernized and focused on the individual’s interests.