Pablo Hernandez de Cos, Bank of Spain Governor and Chairman of the Basel Committee on Banking Supervision, needs to swiftly regulate crypto space and decentralized finance (defi) to avoid the risk of financial instability. I explained that there is. Hernandez de Cos also mentioned how this rapid approach would allow the cryptocurrency system to fall within the scope of regulation before it grows.
Bank of Spain Governor discusses cryptographic regulations
Bank of Spain Governor Pablo Hernandez de Cos, who is also a member of the Basel Committee on Banking Supervision, shared his views on how to tackle cryptocurrency regulation. In a keynote speech presented at the 36th Annual Meeting of the International Swaps and Derivatives Association, Hernandez de Cos said before cryptocurrencies and decentralized financial markets grew and affected the financial stability of the economic system. He explained that a swift move is needed to regulate them.
On this issue, he states:
Despite this tremendous growth, crypto assets still account for only about 1% of global financial assets, and banks’ direct exposure is relatively limited to date. However, we know that such markets can expand rapidly and pose risks to individual banks and overall financial stability.
In addition, the Governor has declared that there can be a balance between welcoming these technologies and mitigating their risks, with a “proactive and positive regulatory and supervisory approach” to the subject. Recommended.
Criticize cryptography and defy
Hernández de Cos also took the opportunity to criticize the current state of the cryptocurrency market, citing cryptocurrency-like memetic currencies such as Dogecoin and the impact of Elon Musk’s ideas on these markets. He states:
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For him, these are not as decentralized as the market intended, and clearly show that characteristics such as “robustness” and “stability” are not due to cryptocurrencies.
This is not the first time the Bank of Spain Governor has discussed the dangers of introducing traditional financial institutions into cryptocurrencies. In February, Hernandez de Cos also warned of the issue, stating that increased exposure of private banks to cryptocurrencies could pose new equity and reputational risks.
What do you think of Pablo Hernandez de Cos, the governor of the Bank of Spain? Please let us know in the comments section below.
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