Christopher Perkins, President of Coinfund, made the bank’s disapproval for the recent article in the Bank for the International Colonies (BIS) on the crypto.
Perkins described his recommendations “completely uninformed and frankly, dangerous”. The BIS report, entitled “Cryptocrences and decentralized Finance: Functions and Financial Stability Implications”, recognizes the growing importance of cryptocurrency with the rise of ETFs, stablecoins and tokenized assets. However, Perkins is strongly opposed to the approach to containing the document to the regulation of cryptocurrencies.
“Guys, crypto is not communism. It is the new Internet that gives anyone access to financial services,” said Perkins. He rejected the comparison with strategies for containing the Cold War. “You cannot control it more than you control the internet.”
Perkins warns against liquidity risks if the crypto is separated
Perkins had witnessed the 2008 first -hand financial crisis as a trader at Lehman Brothers during his collapse. With this experience, he warns that the artificially separation of traditional finances of the cryptocurrency markets could create liquidity risks. Perkins argues that forcing a division between settlement capacity 24/7 of cryptographic markets and the traditional system restricted over time “would lead to the next systemic crisis”.
Instead of confinement, Perkins recommends modernizing traditional financial systems to integrate into blockchain technology. “Capital rules should not” contain “public blockchains – they should encourage them!” he argued. He suggested that the regulations should focus on updating inherited systems rather than isolation of new technologies.
The President of Coinfund also challenged several other conclusions in the BIS report. He particularly focused on his concerns concerning information asymmetries in decentralized finance (DEFI).
Perkins questioned the criticisms of the BIS concerning anonymous developers in DEFI projects. He also noted that traditional financial institutions generally do not publish lists of their developers.
Perkins also disputed the concern of the bis that stablecoins would cause macroeconomic instability in countries like Zimbabwe and Venezuela. “If there is a request for stablescoins USD and it helps to improve the condition of anyone in the world in development, is it perhaps a good thing?!” He wrote. He also added that people around the world deserve access to basic financial services, regardless of monetary stability in their country.
