The Bank for International Settlements (BIS) pushes to isolate cryptographic markets and its controversial recommendations on DEFI and Stablecoins is “dangerous” for the entire financial system, warns the head of an investment company in blockchain.
“Many of their recommendations and conclusions – perhaps due to a mixture of fear, arrogance or ignorance – are completely uninformed and, frankly, dangerous,” said Coinfund president, Christopher Perkins, in a post of April 19, the decentralized finance post: the functions and implications of financial stability. “”
BIS recommendations expose Tradfi to the risks of “unimaginable scale”
“Crypto is not communism,” said Perkins, pushing the call of the bis to a “confinement” approach to isolate the crypto of traditional finance and the wider economy.
“It is the new Internet that offers anyone access to connection to financial services,” said Perkins. “You cannot control it more than you control the internet,” he added.
Perkins warned that an crypto containment approach would expose the traditional financial system to massive liquidity risks “of an unimaginable scale”, in particular when the cryptography market works in real time, 24/7, while traditional financial markets stop after the hours of negotiation.
“If they are implemented, they will cause – not to mitigate – the systemic risk they seek to prevent.”
The report warned that the number of investors and the amount of capital in Crypto and Defi “have reached a critical mass”, the protection of investors becoming a “important concern for regulators”.
Perkins has rejected the claim of the BIS according to which DEFI presents important challenges, asserting rather that it represents a “significant improvement” compared to “opacity” and the imbalances of the traditional financial system.
In relation: Cryptographic industry does not know regulatory capture – lawyer
Responding to the concerns of the BIS concerning the anonymity of Defi developers, Perkins questioned its relevance:
“Sorry, but when did the last time go back to a tradfi company published a list of its developers? Of course, public companies offer a certain degree of disclosure and transparency, but they seem to be murder in favor of the private markets.”
Perkins also criticized the concern of the bis around the stablecoins that this could lead to “macroeconomic instability in countries like Venezuela and Zimbabwe”.
“If there is a request for stablescoins USD and it helps to improve the condition of anyone in the developing world, it may be a good thing,” said Perkins.
Perkins was not the only one to criticize the controversial report. The co-founder of Lightspark, Christian Catalini, also weighed, displaying a series of criticisms on X on the same day. Catalini summed up the relationship with analogy:
“Think: write parking regulations for a fleet of autonomous drones – serious work, two technological jumps behind.”
Review: Altcoin season to strike at T2? Mantra plan to gain confidence: Hodler’s Digest, April 13-19, 19
