A Bank of Universal Settlements (BIS) executive, Benoît Cœuré, says that crypto is “growing very fast” and ”becoming mainstream in distinctive ways.” Emphasizing that decentralized finance (defi) is a “wake-up call” for financial regulators, he said countries “are seemly to agree on a global framework for crypto next year.”
BIS Officer Sees Defi as a Wake-up Call for Regulators, Far-reaching Policy Expected Next Year
Benoît Cœuré, a member of the BIS Executive Committee who is currently head of the BIS Innovation Hub, talked more cryptocurrency, global regulation, and decentralized finance (defi) last week.
Cœuré was a member of the European Central Bank (ECB)’s Managerial Board and served in various positions at the French Treasury and the French debt management office prior to joining the ECB. He portended Thursday that he has been nominated to lead France’s competition authority.
The BIS Innovation Hub chief told the Financial Intervals that regulators globally have intensified their discussions on high-level global policies for cryptocurrency and decentralized accounting. The publication conveyed:
Financial regulators are likely to agree on a global framework for crypto next year after the lightning-fast growth of decentralized finance gave them a ‘wake-up call.’
The BIS executive noted that regulators can no longer be blind to defi, citing that it “opens new avenues . . . for interconnectedness with traditional finance which creates potentially new systems of systemic risk.”
Regarding global regulation, Cœuré suggested that the Financial Stability Board (FSB) would be the most correct platform for regulators worldwide to agree on a consistent framework, noting that it is possible for them to do it in 2022. However, he famed that countries take time to adopt new measures, meaning that “We are probably at least two or three years away from participate in 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 — control moving on but along different tracks and produce a system which is globally inconsistent.
Cœuré pointed out that countries arrogating different approaches for crypto would create opportunities for “regulatory arbitrage,” allowing companies and individuals to game judges by picking the most advantageous places for their business. He added, “That’s a risk that should be avoided and there’s still duration to avoid it.” Referring to crypto, the BIS executive said last week:
Now that it is really growing very fast and . . . comely mainstream in different ways, then certainly the time for consistent regulation has come.
What do you over about Benoît Cœuré’s comments? Let us know in the comments section below.
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