BIS Exec Says Defi Is a Wake-Up Call” for Regulators, Global Crypto Policy Expected in 2022 – Regulation

An executive at the Bank for International Settlements (BIS), Benoît Cœuré, says crypto is “growing very quickly” and “going mainstream in different ways.” He stressed that decentralized finance (defi) is a “wake-up call” for financial regulators and said countries “are likely to agree on a global framework for crypto next year.”

BIS commissioner sees Defi as a wake-up call for regulators, global policy expected next year

Benoît Cœuré, member of the BIS Executive Committee and currently head of the BIS Innovation Hub, spoke last week about cryptocurrency, global regulation and decentralized finance (defi).

Cœuré was a member of the Executive Board of the European Central Bank (ECB) and, before joining the ECB, held various positions at the French Ministry of Finance and the French Debt Management Office. He announced on Thursday that he had been appointed head of France's competition authority.

The head of the BIS Innovation Hub told the Financial Times that regulators worldwide have intensified their discussions on high-level global guidelines for cryptocurrency and decentralized finance. The publication conveyed:

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 noted that regulators can no longer ignore the deficit, citing that it "opens up new avenues... for interconnectedness with traditional finance, potentially creating new forms of systemic risk."

Regarding global regulation, Cœuré suggested that the Financial Stability Board (FSB) is the most appropriate platform for regulators worldwide to agree on a unified framework, noting that in 2022 there will be time to take new measures, meaning that "we are probably at least two or three years away from having a stable landscape globally." The BIS manager described:

The risk in 2022 is that major jurisdictions – [like] Europe, the UK, the US, [and] China – move further but along different paths and produce a system that is globally inconsistent.

Cœuré noted that countries taking different approaches to cryptocurrencies would create opportunities for “regulatory arbitrage,” allowing companies and individuals to take advantage of gaming authorities by choosing the most advantageous places for their business. He added: “This is a risk that should be avoided and there is still time to avoid it.” Regarding crypto, the BIS manager said last week:

Now that it's growing really really fast and . . . become mainstream in different ways, then the time has certainly come for consistent regulation.

What do you think of Benoît Cœuré's comments? Let us know in the comments section below.

Kevin Helms

Kevin, an Austrian economics student, found Bitcoin in 2011 and has been an evangelist ever since. His interests lie in Bitcoin security, open source systems, network effects, and the interface between economics and cryptography.

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