The member of the executive board of the German Central Bank in charge of banking supervision and IT called for the creation of a separate global regulator for decentralized finance business projects.
Joachim Wuermeling recommended set international standards in banking for fintech innovation by criticizing decentralized finance (DeFi). Würmeling called for a discussion on how to treat the fast-growing blockchain-based finance segment, which he believes could lead to the disappearance of traditional banks.
“For me, DeFi is more like a casino for tech-savvy speculators,” said a member of the executive board of the German Central Bank.
He added that DeFi is “growing rapidly, as are its ties to the rest of finance and the economy. Therefore, regulatory options need to be discussed already now, since “there are still too many obstacles to overcome” for the technology to become mainstream.
“I can imagine a global forum like the Basel Committee on Banking Supervision that could set the global ground rules for digital innovation,” Würmeling said, referring to the international organization that sets the rules for traditional lenders like Deutsche Bank or JPMorgan. .
The official acknowledged that “digitalization knows no boundaries” and advised regulators to coordinate their actions when developing oversight rules. The statement by the member of the executive board of the German Central Bank came in response to the call of the international organization of the Financial Stability Board (FSB) to develop new rules for the crypto industry and a fierce debate on how to properly regulate financial services that are not controlled by any single organization.
Recall that the Web3 international community and several dozen crypto companies signed an open letter to EU regulators calling for “reasonable regulation” for the industry.
Source: Bits
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