Benoît Cœuré says regulators may agree to a cryptographic framework in 2022

Benoît Cœuré says regulators may agree to a cryptographic framework in 2022



One of the most senior persons involved in the debate told the Financial Times that after the rapid growth of decentralized finance has sounded the “wake-up call” for them, financial regulators may reach an agreement on a global framework for cryptocurrency next year.

Benoît Cœuré, head of the Innovation Center of the Bank for International Settlements, said that regarding cryptocurrency and Decentralized finance Intensified in recent months.

This former European Central Bank Council member has led the BIS Innovation Center for the past two years, which puts him at the forefront of international deliberations Encryption policy Because the World Central Bank uses BIS to share information and set global guidelines.

Cure, who Announce Nominated to lead the French competition authority on Thursday, said that the regulator allows the market to develop and understands “how crypto assets work” “not necessarily a wrong decision.”

“But now it does grow very fast, and… Into the mainstream in a different way, then it must be time for consistent supervision,” he said in an interview last week.

Kuray said that the new “wake-up call” is decentralized finance—— Fast growing A corner of the cryptocurrency market, which uses distributed ledger technology and so-called “smart contracts” to conduct transactions worth billions of dollars without the need for a central hub like an exchange.

Decentralized finance, or as it is known as DeFi, “opens up new avenues… Interconnection with traditional finance, which creates potential new forms of systemic risks.” Regulators can no longer ignore this, Cœuré said. It is pointed out that DeFi is related to stablecoins and traditional finance, which are widely used as settlement tools on the DeFi platform.

“These [new] The service industry will compete with traditional finance, and funds will flow in and out of one universe to another. This created a compelling reason to start discussing the global principles of cryptocurrency regulation. “

The speed with which various jurisdictions formulate rules has also increased the urgency of providing a global framework. “The risk in 2022 is that large jurisdictions [like] Europe, the United Kingdom, the United States, and China continued to move forward, but along different tracks, and produced a globally inconsistent system,” Cole said.

He added: “This is a risk that should be avoided, and there is still time to avoid it,” he pointed out that different methods will create opportunities for “regulatory arbitrage”. Companies and individuals can choose the most advantageous place for their business. Play with the authorities. .

Cœuré stated that the Financial Stability Board composed of global finance ministries and regulators chaired by BIS will be the most natural forum for agreeing on a framework, and that they are likely to achieve this framework in 2022, but he warned: “We are It will take at least two or three years to form a stable pattern on a global scale,” because it takes time for countries to take these measures.

He added that the cryptographic framework can include agreements for different types of activities and determine whether stablecoins (a form of cryptocurrency backed by traditional assets such as the U.S. dollar) are electronic currencies, money market funds, or securities. It should also include guidance to “regulate service providers in these ecosystems and platforms based on the services they provide.”

Cure is in favor of “strong consumer protection rules” and “personally don’t mind whether pension funds are prohibited from investing in cryptocurrencies… This seems to run counter to the security you expect from pension funds.”

Nonetheless, he acknowledged that although there are good reasons for global cooperation, the ways in which different countries handle privacy will limit the scope of the global framework, and some countries are unwilling to share detailed information about the technologies used in their ecosystems. Technology used in finance often overlaps with technology used for other strategic purposes.

“The final decision of a sovereign state will be… On the one hand, it is the consideration of sovereign strategy, and on the other hand, it is the consideration of the sound operation of the financial system,” he said. “This is nothing new, that’s it… These balances are changing because technology is very important. The new risk is that the government will increase the technological fence and cause the global financial system to split.”

He also said that policy makers are increasingly aware that central bank digital currencies “should not be regarded as a separate discussion” and should not be allowed to stay on a separate track of its development. “We have seen the discussion turn… CBDC (Central Bank Digital Currency) is… a fundamental contribution to the new ecosystem,” he said.

“You need central bank currency as a safe asset that can be used as a settlement asset to stabilize the new system… This is not about CBDC being a sovereign substitute for private funds, but about CBDC being the glue that holds the system together. ”


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