The Bank for International Settlements (BIS) or Bank of International Settlements (BIS) says that authorities can curb the risk posed by cryptocurrencies in three ways: regulate them, contain them and finally ban them altogether. According to this institution made up of central banks from several countries, CBDCs represent a credible alternative.
Should we shut down cryptocurrencies?
The BIS has not called for the annihilation of the cryptocurrency industry. Also, she doesn’t have the power. The institution is satisfied with proposing solutions. However, as we learned The blockthe fact that it raises the CBDC as an alternative immediately leaves you suspicious.
In its report, the BIS identified the advantages and disadvantages of each approach. He thinks that different approaches can be put into practice. Thus, for example, we could find a sort of combination between regulation and ban.
The authorities of several countries around the world are very strict on cryptocurrencies these days. Omit responsibility for FTX drop in this phenomenon it would be telling the story halfway. Incidentally, the BIS first mentions the collapse of FTX and then the collapse of stablecoin TerraUSD.
What are the solutions recommended by the BIS?
The BIS offered the ban as a solution. But he admits that this would not be acceptable for building a society of freedoms. The institution also admits that it would be a considerable technical challenge. Indeed, once the prohibition law is passed, it could easily be circumvented.
When it comes to containing them, the BIS is a little more optimistic. He proposes limiting them so that they are no longer or only slightly involved TradFi. The BIS proposes to the SEC, the policeman of the American stock exchange, to ban Bitcoin ETFs. After the restrictions on TradFi, the problem of investor protection will have to be solved. According to the BIS, this is a big deal because if the investor is not protected, the regulators will have failed.
The bankruptcy of FTX in particular, and many other cryptocurrency companies, continues to hurt the sector a lot. No one can say at this moment what global consensus will be reached. But there’s a good chance that the cryptocurrencies take an even harder hit.
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