Bank for International Settlements Demands More Global Cryptocurrency Regulation
The increase in the popularity of all cryptocurrencies has not gone by unnoticed. In fact, we’ve seen a lot more opposition from banks and governments in this regard, and it seems this “crackdown” will not relent anytime soon. Most recently, the Bank for International Settlements stated that it wants authorities to prepare additional regulations to curb the spread of cryptocurrencies. It’s a rather interesting statement, although it is evident that regulating this industry will only get people so far.
The Bank for International Settlements Doesn’t Like Cryptocurrency
It is no secret that financial institutions have no love lost for any form of money that they cannot fully control. In the case of Bitcoin and cryptocurrencies, the opposition from financial institutions has only intensified in the past few months. Major banks actively prevent customers from purchasing Bitcoin or other cryptocurrencies as of right now. It is a very troublesome situation, but one that will not change in the near future.
If this situation were left up to the Bank for International Settlements, things would only get worse moving forward. More specifically, the institution has warned regulators all over the world to prepare for an “invasive spread of cryptocurrencies”. In their mind, it is the authorities’ responsibility to protect consumers and investors in a positive way, even if that means resorting to rather extreme measures. It seems the BIS plans to introduce even more cryptocurrency regulation in the future, even though it remains to be seen how that will work out.
While the Bank for International Settlements considers cryptocurrency to be on the same level as most global diseases, it remains to be seen if authorities will heed this warning. We have seen governments and financial institutions take some interesting actions when it comes to Bitcoin and altcoins. In South Korea, for example, cryptocurrency exchanges imposed regulation upon themselves, which was later approved by the country’s government. This goes to show regulation isn’t always negative, even though that is still how most people see it these days.
Cryptocurrency markets experienced a meteoric rise throughout 2017. In early 2018, the value of these currencies has essentially been cut in half, but that is not entirely unexpected at this point in time. After all, the market growth was rather steep, resulting in increases of nearly 2,000% for Bitcoin. Such major gains could not go unpunished, and many people started cashing out their holdings earlier this year. It seems the markets will continue to recover, though, which only makes this warning by the Bank for International Settlements more interesting.
According to the BIS’s general manager, Agustín Carstens, the world doesn’t need new currencies to make payments more efficient. Instead, he wants authorities to focus on ensuring technological advancements cannot result in profits from illegal activities. Allegedly, the time is now to educate investors and consumers alike, especially given the volatility of all cryptocurrency markets in existence. Ensuring that cryptocurrencies do not become entrenched must be the top priority for regulators worldwide, in Carstens’ view.
Moreover, Carstens claims that Bitcoin has become a combination of a bubble, a Ponzi scheme, and an environmental disaster. While all of these labels have been associated with Bitcoin in the past, there is a lot more to it than meets the eye. It is unfortunate that the Bank for International Settlements is rather short-sighted when it comes to crypto, but few people expected anything different at this point. It will be interesting to see if banks and authorities decide to introduce additional regulation in the coming months and years.