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A high-ranking official at the Bank for International Settlements (BIS) is reportedly calling on financial regulators around the globe to agree on an international regulatory framework for cryptocurrencies next year.
Benoît Cœuré, head of the BIS’ innovation hub, tells the Financial Times that the explosion of decentralized finance (DeFi) has created a “compelling reason” to establish global principles for crypto regulation.
Cœuré, a French economist, says DeFi’s potential interconnectedness with the traditional financial system generates new forms of systemic risk.
He says the Financial Stability Board (FSB), an international body that monitors and makes recommendations about the global financial system, would be a good place to start building a worldwide framework for crypto regulations. He thinks finance ministers could agree on a such framework sometime next year.
Cœuré says the framework should classify whether stablecoins are electronic money, securities or money market funds. He also supports banning pension funds from investing in cryptocurrencies.
Cœuré explains,
“[Investing in crypto] seems to be contrary to the kind of safety that you expect from a pension fund.”
The economist also notes that recently, there has been an increase in conversations about establishing a global crypto regulatory framework.
“Now that it is really growing very fast and… becoming mainstream in different ways, then certainly the time for consistent regulation has come.”