Key takeaways:
- The Governor of Banco de Portugal joins a chorus of regulators who argue that national efforts to regulate crypto would be ineffective without a worldwide framework.
- Centeno spoke of crypto assets, decentralized finance, and the “undeniable risk” of their long-term unviability.
The Governor of Banco de Portugal, Mário Centeno, joins a chorus of regulators who argue that national efforts to regulate cryptocurrencies would be ineffective without a worldwide framework.
On October 2, Centeno made the following remarks in his welcome address at the 2023 Banco de Portugal Financial Stability Conference. He asked for international cooperation to establish a “robust framework” and prevent the potential of regulatory arbitrage:
“It would be short-sighted to believe that regulating and supervising these global risks and international players at the national level will suffice.”
Centeno spoke of crypto assets, decentralized finance, and the “undeniable risk” of their long-term unviability. The official stated his skepticism regarding the ability of digital assets to democratize society and even their ability to endure in the long run:
“These volatile products experienced an enormous surge in popularity during the COVID-19 pandemic but proved to be unsustainable and, unsurprisingly, culminated in the collapse of several products.”
The Markets in Crypto-Assets (MiCA) Act, the first comprehensive crypto framework created by the European Union, was welcomed by Centeno, but he pressed for further international coordination of regulatory efforts based on the principle “same risk, same regulation.”
The executive director of strategy, policy, and control at the German Federal Financial Supervisory Authority recently made a statement that was roughly in line with this sentiment.
Rupert Schaefer noted in a blog post that the acceptance of MiCA in the EU seemed to advance the regulation of cryptocurrencies, but he also raised questions about worldwide inconsistencies.
The G20 page for the 20 major economies in the world was updated on August 1 with the release of India’s Presidency Note for Contribution to a Roadmap on a Global Framework for Cryptocurrency. A meeting of international governments is the G20.
The suggestions made in July by the Financial Stability Board for the global crypto framework were approved by India. The document supports the advice given by the FSB, FATF, and IMF.
