Pablo Hernandez de Cos is the governor of Bank of Spain. He has warned again about cryptocurrency and its growth. Hernandes d’Cos noted that the global market for cryptocurrency is smaller than it was before 2008’s financial crisis. The market also has stronger links to traditional finance.
The Governor of the Bank of Spain warns against expanding crypto
The Bank of Spain governor warned of potential dangers of mixing cryptocurrency markets with established financial institutions. Pablo Hernandez de Cos concluded the conference by explaining how the increased interconnection of these unregulated markets with traditional institutions is due to the high number trading instruments, including ETFs futures and investment funds, that were launched in the last bull market.
In this sense, Hernandez De Cos also stated that “some large private companies publicly announced their interest in using crypto assets for cash management, while others campaigned for it.” This has pushed the governor of the Bank of Spain to raise warnings about the instability that this inclusion of crypto variables might have in Spain.
The Market’s Growth and its Dangers
Some estimates put the market at more than 60 Billion Euros ($64 billion) and have seen a rapid growth. The governor of the Bank of Spain also made reference to this, stating that they “must not overlook the fact that this market is already larger than that for subprime mortgages in the run-up to the global financial crisis.”
Hernandez de Cos further explained that trading volumes for some of the world’s most valuable assets such as bitcoin, ethereum and tether are close to the volume traded on the New York Stock Exchange in some sessions. The governor believes these crypto assets need to be controlled soon due to their relative volatility.
Hernandez de Cos said that:
Financial Stability Board, (FSB) recently stressed that these markets can quickly tip over if they’re not well regulated or supervised.
The Bank of Spain warns about risks that crypto can pose to traditional market currencies. This warning isn’t the first. The Bank of Spain also published a report in April that highlighted the risks associated with crypto-related traditional markets and how stablecoins could impact economic stability.
How do you feel about new warnings from the Governor of the Bank of Spain concerning the rise of cryptocurrency markets? Leave your comments below.
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