Bank of International Settlements head says cryptos require more regulation
Agustín Carstens has called for cryptocurrencies to be subject to more regulations while arguing that virtual currencies have not made a significant dent in global finance.
Agustín Carstens, general manager of the Bank for International Settlements, has called for even more crypto regulations stating that virtual currencies are a tool for circumventing financial laws.
In an interview with CNBC on Wednesday, the BIS general manager identified money laundering and terrorism financing as areas that require more robust cryptocurrency regulations.
Carstens’s comments, a common refrain among crypto critics, come despite the preponderance of established facts indicating that crypto criminality occupies a minute proportion of global cryptocurrency commerce.
According to Carstens, cryptocurrencies have a notoriety for being instruments of criminal activities due to the pseudonymous nature of virtual currency transactions.
However, blockchain intelligence firms continue to work with regulators and law enforcement agencies to provide robust crypto forensic capabilities. Indeed, the traceable nature of Bitcoin (BTC) transactions enabled U.S. law enforcement to locate and shut down a global child pornography ring back in October 2019.
Darknet narcotics vendors who adopt crypto payments are routinely apprehended and put on trial in many countries around the world.
Apart from espousing well-worn anti-crypto soundbites, the BIS general manager argued that cryptocurrencies are not a threat to the global financial establishment. Meanwhile, back in December 2019, Carstens expressed fears that private cryptos could disintermediate central banks in the global financial architecture.
Carstens added that he did not see the path forward for global crypto dominance, adding that virtual currencies are yet to make any significant progress in terms of being used as money.
The BIS executive also touched on stablecoins, stating that fiat-pegged tokens could have limited adoption cases and dismissing any overall threat to sovereign, central bank-backed fiat currencies.
Despite dismissing stablecoins, Carstens highlighted the regulatory issues associated with projects like Diem, saying that such tokens will require specialized laws to ensure that they are “fit for purpose.”
The BIS general manager has previously called for central banks to be at the helm of the evolution of digital money.
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Author: Osato Avan-Nomayo