At a time when inflation is returning to peaks that we had seen more for decades, Benoît Cœuré, director of the innovation center of the Bank for International Settlements (BIS), prefers to look elsewhere. According to him, global regulation of cryptocurrencies is more than desirable, starting in 2022. However, we note that the BIS is no longer as reluctant to digital assets as before.
BIS wants global cryptocurrency regulation in 2022
Likely future president of the Competition Authority in France, Benoît Cœuré seems to want to leave a mark as director of the innovation pole of the BRI . While participating in the implementation of the Franco-Swiss Jura project , the Financial Times reports its wish to see the establishment of a global regulation of cryptocurrencies in 2022.
According to Coeuré, the rapid growth of decentralized finance (DeFi) has accelerated discussions around major common global principles for the regulation of crypto-assets.
Over the past two years, the BIS has also issued numerous opinions and published a few reports relating to digital assets, calling for better regulation. These opinions and reports were generally not kind to the industry , with cryptocurrencies seen as a threat.
Global regulation of cryptocurrencies to wake up local authorities
However, there is a paradigm shift within the BRI. While crypto-assets were constantly considered to be bad students, Benoît Cœuré is attacking local authorities this time around .
Indeed, the exponential development of DeFi should be seen as a red flag for financial regulatory authorities . It is therefore necessary to agree as quickly as possible on the principles of a global regulation of cryptocurrencies.
The director of the BRI innovation pole believes that it was not necessarily a bad decision to let the market develop . This has indeed enabled regulators to understand how digital assets work.
However, Cœuré recognizes that growth was very rapid and that many institutions have rushed into this booming market. Noting that crypto-assets and DeFi have indeed become essential activities , Benoît Cœuré calls for coherent regulation.
So, while the BIS had recently said all the good that it thought of central bank digital currencies (MNBC or CBDC for Central Bank Digital Currencies ), it can now only take note of the interest of many actors from traditional finance to cryptocurrencies .
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The BIS and the IMF on the same wavelength on the regulation of cryptocurrencies
For Benoît Coeuré, DeFi is in direct competition with traditional finance and bridges are being created between the two. It is therefore necessary to regulate quickly and in consultation. His fear is to see a different regulation in the United States, in Europe and in China .
The call from the director of the BIS innovation pole is reminiscent of that of the International Monetary Fund (IMF) just a few days ago. Indeed, the Washington-based financial institution also wants global and coordinated regulation of cryptocurrencies.
While large financial institutions were until recently rather in a head-on opposition to digital assets, they now have no choice but to see them at their fair value . And that’s why they call for global regulation, rather than outright rejection.