Regulators and bankers exchanged ideas at Davos to tackle the challenges of regulating cryptocurrency and digital assets. The focus of the discussions was that this area should be regulated as soon as possible.
Crypto regulations in focus at Davos 2023
Regulators and bankers may not always agree on cryptocurrency regulations. However, cryptocoin.comAs you follow, they were able to meet in Davos on the regulation of the digital asset market and cryptocurrencies. Singapore Senior Minister Tharman Shanmugaratnam and European Central Bank Governing Council member Francois Villeroy de Galhau highlighted the necessity of crypto regulation during a panel discussion on the challenges banks face.
Colm Kelleher, President of UBS Group AG, explained his views on this issue. According to Kelleher, regulators have kept their eyes on the non-banking sector wholesale. With these words, Kelleher started the discussion about digital assets.
“Cryptocurrency regulations are urgently needed”
Villeroy reacted by citing recent examples of financial instability, such as the performance of money market funds, UK pension funds affected by liability-focused investments, and the bankruptcy of Sam Bankman-Fired’s ‘Sam’s Club’. That’s why banks are the most challenging today, he said.
In addition, Villeroy noted that they all share the feature of being affiliated to institutions other than banks and they are insufficient in this regard. He added the changing landscape as the reason and called for swift action to enact non-bank regulation, starting with cryptocurrency. In this context, Villeroy made the following statement:
What we’re talking about basically has one thing in common. That is, they provide services other than banks. However, we are now lagging behind them. So everything gets more difficult as time progresses. Therefore, we urgently need to regulate the cryptocurrencies.
Kelleher says blockchain is ‘unstoppable’
Some things were perfectly clear to Tharman. For example, it needs to be regulated for things like money laundering, whether it’s regular finance or cryptocurrency. Kelleher reaffirmed an opinion often expressed by executives of both traditional banking institutions and crypto businesses. Regarding the desire of certain UBS customers to invest in digital tokens, he added:
We are looking for a regulatory structure that will allow us to adapt for our clients.
Kelleher issued a note of warning about the current challenge of ensuring compliance with laws and policies surrounding KYC (know your customer) standards and AML (anti-money laundering) rules. However, he was quite optimistic about the technology underlying Blockchain. He even described her as unstoppable.
Citigroup CEO Jane Fraser interrupted, saying it was critical to take a step back. Instead of discussing cryptocurrency, She said they should discuss other topics, potentially claiming it is something less new and shiny. Thus ended the crypto debate.
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