At the World Economic Forum 2023 in Davos, Switzerland, representatives of global banks pressed regulators, also present at the event, to create urgent regulations for the cryptocurrency market.
According to information from Bloomberg, last Wednesday (18th), in a discussion on this topic, a representative from Singapore called the cryptocurrency market “crazy.”
Leaders cited cases from 2022, which saw a major crisis emerge in the sector and attract global attention from regulators. One of the biggest problems with cryptocurrency is LUNA, from the Terra ecosystem. Investors from all over the world recorded losses with the death of the project, most of them from South Korea.
Then, the last stretch from last year is still accompanied by the end of FTX in November, a brokerage that has gained global presence and prominence. And again, there was a string of losses that involved the regulators, and pushed for the creation of the rules.
At the Davos Forum, regulators are talking to banks about regulating cryptocurrencies
At a panel seen by Bloomberg in Davos, UBS chief Colm Kelleher declared that regulators were not properly tracking the “non-bank” market.
Colm, representing one of the largest banks in Switzerland, announced that the banking sector is safe after years of great development in this sector. Thus, the risk of systemic failure is low, but the same is not true of the non-banking sector.
According to him, banks have been spared the cryptocurrency crisis due to their resilience, but the sector cannot continue unchecked.
If there are clear rules for the cryptocurrency market, more banks are expected to join the industry. According to him, UBS itself seeks organizational clarity to offer products to its customers.
ECB representative defends urgent regulations
During the panel discussion “Banking in the Eye of the Storm”, the President of the French Central Bank and member of the Governing Council of the European Central Bank (ECB), François Villeroy de Gallo advocated an urgent organization of the sector.
In the debate between banks and regulators, it is clear that the intention to create broad rules for the cryptocurrency market is a discussion that should grow in many countries.
According to Singapore Minister Tharman Shanmugaratnam, the country has already taken measures to make it more difficult to use cryptocurrency as a means of money laundering. However, he realizes that more rules need to be created for brokers.
It should be noted that many countries are already discussing the rules of the cryptocurrency market. Among the countries that have new legislation coming into force in the coming months is Brazil. This is because at the end of 2022, then-President Jair Bolsonaro sanctioned Marco Das cryptocurrencies, with Law No. 14.478/2022.