A senior official at the Bank for International Settlements (BIS) has reportedly called on financial regulators around the world to agree on an international regulatory framework for cryptocurrencies next year.
Benoît Coeuré, head of the BIS innovation hub, told the Financial Times that the explosion in decentralized finance (DeFi) has created a “compelling reason” to establish global principles for the regulation of crypto.
Coeuré, a French economist, argues that DeFi’s potential interconnection with the traditional financial system generates new forms of systemic risk.
He says the Financial Stability Board (FSB), an international body that monitors and makes recommendations on the global financial system, would be a good place to start building a global framework for crypto regulations. He thinks finance ministers could agree on such a framework next year.
Coeuré says the framework should classify whether the stablecoins are electronic money, securities, or money market funds. He also supports the ban on pension funds from investing in cryptocurrencies.
“[Investing in crypto] appears to be contrary to the kind of security one expects from a pension fund.
The economist also notes that recently there has been an increase in conversations about establishing a global regulatory framework for crypto.
“Now that it’s growing really, really fast and… it’s becoming mainstream in different ways, the time has certainly come for some consistent regulation. “
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