Several central banks and global regulators have taken advantage of the ongoing World Economic Forum (WEF) summit in Davos to call for an urgent rollout of basic regulations targeting cryptocurrencies such as Bitcoin (BTC).
According to the bankers at the summit, the evolving nature of the cryptocurrency sector and the speculative nature of digital assets means that regulators need to step in and enact the necessary laws, bloomberg Reported on January 18th.
The group led by Senior Singaporean Minister Tharman Shanmugaratnam, ECB Board Member François Villeroi de Gallau, and UBS Group AG Chairman Colm Kelleher agreed that recent developments in the cryptocurrency market required regulation.
According to Villeroy de Galhau, incidents such as the collapse of FTX and the performance of MMF can be linked to what he called non-banking.
“The biggest challenge today is non-banks. They all have one thing in common – they’re all linked to non-banks. And here we are behind. It’s more difficult because it’s a landscape that’s evolving a lot. We have to rush some urgent non-bank regulation starting with cryptocurrencies,” he said.
Adopt basic laws
Elsewhere, Kelleher suggested that assets in the crypto space should be able to counter the “fundamental barrier” against money laundering. In this case, he notes that since most cryptocurrency products cannot meet clear anti-money laundering controls, companies in the space “cannot justify selling the product as it is currently regulated.”
Additionally, Kelleher expressed his bullish stance on blockchain technology, stating that it is “unstoppable” while acknowledging that there may be interest from UBS clients in exploring crypto products.
“We are looking for a regulatory framework that will allow us to accommodate this for our customers,” he said.
Encryption regulation risks
Interestingly, despite calling for laws, Shanmugaratnam warned that introducing regulations could legitimize a sector he says is “speculative in nature” and “somewhat crazy”. But he has pushed to regulate the industry to close loopholes that could be exploited for vices such as money laundering.
“Some things are very clear: whether it’s cryptocurrency or traditional finance, you have to regulate things like money laundering,” he said.
Notably, the recent growth in cryptocurrency found a place in the discussions at the Davos summit, where delegates were challenged to lead the industry regulation.
As reported by Coinphony, Nigel Green, CEO of financial management firm deVere Group, has warned that the WEF will fail if no efforts are made to reignite the debate over crypto regulation.
Post-Davos 2023 appeared: Global banks pressed for urgent regulation of bitcoin first on Coinphony.