A Bank of International Settlements (BIS) executive, Benoit Coeure, 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 Views Defi As a Wake-up Call For Regulators, Global Strategy Expected Next year

Benoit Coeure is a member the BIS Executive Committee and the BIS Innovation Hub. He spoke last week about cryptocurrency, global regulation and decentralized finance (defi).

Coeure is a member the European Central Bank’s Executive Board. He previously served in various positions at France’s Treasury and the French Debt Management Office before joining the ECB. He announced Thursday that France’s competition authority has been nominated for him.

The chief of the BIS Innovation Hub told the Financial Times that global regulators have increased their discussions about high-level global policies regarding cryptocurrency and decentralized financing. The following information was conveyed by the publication:

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 stated that regulators cannot ignore defi anymore, citing that it opens up new avenues. . . Interconnectedness with traditional finance can create new forms of systemic risks .”

Regarding global regulation, Coeure 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. He noted, however, that it takes time for countries to adopt new measures. This means that we are likely at least two or three more years from having stable global regulation. The Financial Stability Board (FSB) would be the best platform for regulators worldwide to agree on a consistent framework.

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.

Coeure stated that different countries’ approaches to crypto could create “regulatory arbitrage” opportunities, allowing individuals and companies to play authorities by choosing the best places for their businesses.

Coeure pointed out that countries adopting different approaches to crypto would create opportunities for “regulatory arbitrage,” which allows individuals and companies to play authorities by choosing the most advantageous places for their business.

Now that it is really growing very fast and . . . Whenever these technologies become mainstream, it is time to regulate them.

What do you think about Benoit Coeure’s comments? Comment below.

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