BIS Exec Says Defi Is a 'Wake-up Call' for Regulators, Global Crypto Policy Expected in 2022 – Regulation Bitcoin News
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.”
BIS Officer Sees Defi as a Wake-up Call for Regulators, Global Policy Expected Next Year
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.
The BIS Innovation Hub chief told the Financial Times that regulators globally have intensified their discussions on high-level global policies for cryptocurrency and decentralized finance. The publication conveyed:
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, the U.K., the 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 . . . becoming mainstream in different ways, then certainly the time for consistent regulation has come.
Source: Read Full Article