The cryptocurrency market will likely get a global regulatory framework due to the rapid growth of decentralized finance (DeFi), Benoît Cœuré, chief of the Bank for International Settlements' innovation hub, told the Financial Times.
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Cœuré emphasized that the industry is growing "very fast and [...] becoming mainstream in different ways."
"[DeFi] opens new avenues [...] for interconnectedness with traditional finance which creates potentially new forms of systemic risk," he noted.
Despite these risks, DeFi will be competing with traditional finance, and money "will flow in and out from one universe to another," Cœuré said.
This competition is a "compelling reason" for regulators to start a discussion on global principles for cryptocurrency regulator framework. While no timeline has been established at this point, financial regulators all over the globe are probably "at least two or three years away from having a stable landscape globally," Cœuré highlighted.
As iHodl earlier reported, the Reserve Bank of India (RBI) is considering a complete ban on cryptocurrencies. According to reports, the central bank made a detailed presentation to the board showing "serious concerns" about how cryptocurrencies affect the macroeconomic and financial stability of India. While details remain undisclosed, one of the sources close to the meeting said that the watchdog emphasized the challenge of regulating intangible assets that originate overseas.
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