Mário Centeno, the governor of the Portuguese central bank, has echoed the sentiments of regulators worldwide by emphasizing the need for a global regulatory framework for cryptocurrencies. Speaking at the 2023 Bank of Portugal Financial Stability Conference on October 2, Centeno stressed the importance of international cooperation to establish a robust framework. He warned against the potential for regulatory arbitrage if cryptocurrencies are regulated solely at the national level:
"It is short-sighted to think that regulating and overseeing these global risks and international actors at the national level is enough."
Centeno expressed skepticism about the long-term viability of crypto assets and decentralized finance (DeFi), citing the undeniable risks associated with them. He expressed doubts about their democratizing potential and questioned whether they can endure, given their volatility and the collapse of several crypto products:
"These volatile products, which saw a massive surge in popularity during the COVID-19 pandemic, proved unsustainable and, not surprisingly, ultimately led to the collapse of several products."
While Centeno acknowledged the European Union's (EU) Market in Crypto-Assets (MiCA) regulations as a significant step, he called for further strengthening of international regulatory efforts, emphasizing the principle of "same risks, same supervision." This sentiment aligns with recent calls for global cooperation on cryptocurrency regulations from leaders like Indian Prime Minister Narendra Modi and regulators like Rupert Schaefer of BaFin.
Portugal Central Bank Chief Calls for Global Crypto Regulation
Mário Centeno, the governor of the Portuguese central bank, has echoed the sentiments of regulators worldwide by emphasizing the need for a global regulatory framework for cryptocurrencies. Speaking at the 2023 Bank of Portugal Financial Stability Conference on October 2, Centeno stressed the importance of international cooperation to establish a robust framework. He warned against the potential for regulatory arbitrage if cryptocurrencies are regulated solely at the national level:
"It is short-sighted to think that regulating and overseeing these global risks and international actors at the national level is enough."
Centeno expressed skepticism about the long-term viability of crypto assets and decentralized finance (DeFi), citing the undeniable risks associated with them. He expressed doubts about their democratizing potential and questioned whether they can endure, given their volatility and the collapse of several crypto products:
"These volatile products, which saw a massive surge in popularity during the COVID-19 pandemic, proved unsustainable and, not surprisingly, ultimately led to the collapse of several products."
While Centeno acknowledged the European Union's (EU) Market in Crypto-Assets (MiCA) regulations as a significant step, he called for further strengthening of international regulatory efforts, emphasizing the principle of "same risks, same supervision." This sentiment aligns with recent calls for global cooperation on cryptocurrency regulations from leaders like Indian Prime Minister Narendra Modi and regulators like Rupert Schaefer of BaFin.
