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Benoît Cœuré, an executive at the Bank for International Settlements (BIS), stated that cryptocurrencies are “growing very fast” and “are becoming mainstream in a different way.” He emphasized that decentralized finance (defi) is a “wake-up call” to financial regulators. He said that countries “are likely to agree on a global framework for cryptocurrency next year.”
BIS officials regard Defi as a wake-up call to regulators, and global policies are expected to be introduced next year
Last week, Benoît Cœuré, member of the BIS Executive Committee and head of the BIS Innovation Center, talked about cryptocurrency, global regulation, and decentralized finance (defi).
Cœuré is a member of the Executive Committee of the European Central Bank (ECB) and held various positions in the French Ministry of Finance and the French Debt Management Office before joining the European Central Bank. He announced on Thursday that he had been nominated to lead the French competition authority.
The head of the Innovation Center of the Bank for International Settlements told the Financial Times that global regulators have intensified discussions on high-level global policies for cryptocurrency and decentralized finance. The publication conveyed:
After the rapid growth of decentralized finance has sounded the “wake-up call” for them, financial regulators may reach agreement on a global framework for cryptocurrency next year.
The executive at the Bank for International Settlements pointed out that regulators can no longer ignore defi on the grounds that it “opens up new avenues.” .. Interconnection with traditional finance, which will generate potential new forms of systemic risk. “
Regarding global regulation, Cœuré suggested that the Financial Stability Board (FSB) would be the most suitable platform for global regulators to agree on a consensus framework, and pointed out that they might do so in 2022. However, he pointed out that it is time for countries to adopt new measures, which means that “it may take at least two to three years for us to achieve a stable pattern on a global scale.” The BIS executive described:
The risk in 2022 is for large jurisdictions – [like] Europe, United Kingdom, United States, [and] China-keep going, but on a different track, and produce a globally inconsistent system.
Kuray pointed out that the adoption of different encryption methods by countries will create opportunities for “regulatory arbitrage,” allowing companies and individuals to play with the authorities by choosing the most advantageous place for their business. He added: “This is a risk that should be avoided, and there is still time to avoid it.” Speaking of encryption, an executive at the Bank for International Settlements said last week:
It is indeed growing very fast now. .. Become the mainstream in a different way, then it must be time for unified supervision.
What do you think of Benoît Cœuré’s comments? Please let us know in the comments section below.
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