A Bank of International Settlements (BIS) executive, Benoît Cœuré, says that crypto is “growing very fast” and ”becoming mainstream in different ways.” Emphasizing that decentralized finance (defi) is a “wake-up call” for financial regulators, he said countries “are likely to agree on a global framework for crypto next year.”
The BIS Officer Sees the Defi as an Alarm Call to Regulators. Next Year’s Global Policy
Benoît Cœuré, a member of the BIS Executive Committee who is currently head of the BIS Innovation Hub, talked about cryptocurrency, global regulation, and decentralized finance (defi) last week.
Cœuré was a member of the European Central Bank (ECB)’s Executive Board and served in various positions at the French Treasury and the French debt management office prior to joining the ECB. He announced Thursday that he has been nominated to lead France’s competition authority.
According to the BIS Innovation Hub chief, regulators around the world have increased their efforts in discussions about high-level policies regarding cryptocurrency and decentralized financing. It stated that:
Financial regulators are likely to agree on a global framework for crypto 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 defi, citing that it “opens new avenues . . . for interconnectedness with traditional finance which creates potentially new forms of systemic risk.”
Regarding global regulation, Cœuré suggested that the Financial Stability Board (FSB) would be the most suitable platform for regulators worldwide to agree on a consistent framework, noting that it is possible for them to do it in 2022. However, he noted that countries take time to adopt new measures, meaning that “We are probably at least two or three years away from having a stable landscape globally.” The BIS executive described:
The risk in 2022 is that large jurisdictions — [like]Europe, U.K., U.S. [and] China — keep moving on but along different tracks and produce a system which is globally inconsistent.
Cœuré pointed out that countries adopting different approaches for crypto would create opportunities for “regulatory arbitrage,” allowing companies and individuals to game authorities by picking the most advantageous places for their business. He added, “That’s a risk that should be avoided and there’s still time to avoid it.” Referring to crypto, the BIS executive said last week:
Now that it is really growing very fast and . . . As these technologies become mainstream in many ways, the time has come for uniform regulation.
What do you think about Benoît Cœuré’s comments? Please leave your comments below.
Images CreditsShutterstock. Pixabay. Wiki Commons
DisclaimerThis information is provided for educational purposes only. It does not constitute an offer, solicitation, or recommendation of any company, products or services. Bitcoin.com doesn’t offer investment, tax or legal advice. The author and the company are not responsible for any loss or damage caused or alleged caused by the content or use of any goods, services, or information mentioned in the article.