The governor of the Bank of Spain (BE) and a member of the Basel Committee on Banking Supervision (BCBS) urged not to wait until the crypto industry grows and poses a danger to the financial system.
Pablo Hernández de Cos delivered the keynote reportexplaining how digital asset regulation issues should be addressed. Speaking at the annual general meeting of the International Swaps and Derivatives Association (ISDA), the official said that the cryptocurrency and decentralized finance (DeFi) industry needs to be brought into line with the law immediately.
Hernandez de Cos issued a warning: if the world’s banks and regulators do not pay due attention to this right now, the industry will grow and greatly affect the financial stability of the economic system.
“Despite its phenomenal growth and popularity, the crypto industry still accounts for only 1% of the total global financial assets, and the direct risks of banks are relatively small today. However, experience shows that such markets can grow rapidly and create risks for individual banks and overall financial stability,” said the BE Governor.
The head of the Spanish central bank proposed a “proactive and far-sighted” strategy and added that if everything is done correctly, it will be possible to maintain a balance between openness to new technologies and reducing the risks associated with them. The civil servant criticized the current state of the digital currency market, mentioning Dogecoin (DOGE) as a “cryptocurrency meme” and its impact on traders, as well as the role Tesla CEO Elon Musk plays in this.
Hernandez de Cos said that there are few assets with a similar capitalization that can show such fluctuations from a simple tweet or from “sketches on a late night show.” The official was referring to the American show Saturday Night Live, where Musk performed last year. A few weeks before the show, the price of DOGE rose sharply, but dropped by 40% after the show.
Earlier, BE reported that against the background of tightening the policy of regulation of digital assets, users from Europe increasingly prefer decentralized finance.
Source: Bits
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