A global banking expert group sponsored by the World Economic Forum (WEF) convened on the need for global crypto regulation, including stablecoins and unsupported crypto assets. The panel agreed that there needs to be at least some basic regulation of these assets, as well as bank-equivalent regulation of blockchain applications that seek to offer products similar to those offered by traditional banks.
The WEF Global Banking Panel calls for more crypto regulation
Global bankers agreed on the need for more explicit regulation of cryptocurrencies. Thepaneltitled “Banking in the Eye of the Storm,” part of the World Economic Forum’s (WEF) Davos 2023 meeting,
examined the cryptocurrency market after events unfolded in 2022, including the fall of the cryptocurrency exchange FTX, as central banks and private banks directed The panel discussed the following.
François Villeroy de Galhau, Governor of the Central Bank of France, explained that the regulation of crypto markets is key to controlling the damage these could cause to investors in the future Villeroy de Galhau stated, “The cryptocurrency market is a key to the future of the economy, and the crypto market is a key to the future of the economy.
The question is not whether we must regulate … Indeed we must regulate. Some say it is not a question of regulation, but of prohibition.
Villeroy de Garaud also pushed for partnerships between central banks and private financial institutions to promote innovation, such as the adoption of CBDC (central bank digital currency).
The French central bank governor also looks forward to the implementation of the final Basel Committee rules in all jurisdictions, which were approved in December and provide a mandate for bank exposure to cryptocurrency assets.
Basic Level of Regulation
All panelists agreed on the need for at least a minimum level of regulation, including anti-money laundering (AML) and customer information (KYC) measures for all assets, but Singapore Senior Minister Tharman Shanmugaratnam said that some assets are better off unregulated and clarified the risks that investing in these assets may pose to possible investors.
However, he clarified that cryptocurrencies and blockchain-based technologies aimed at providing services comparable to banks, including stablecoins, should be regulated in the same way as traditional financial institutions.
Shanmugaratnam believes that the bank’s answer to crypto and blockchain innovation should be to link local national systems with today’s global payment systems, helping immigrants andSMEs. currently served by cryptocurrency alternatives.
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