The Bank for International Settlements Makes 3 Proposals to Regulate the Cryptocurrency Sector
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Jan. 19, 2023

Experts from the Bank for International Settlements (BIS) have just published "Addressing the risks in crypto: laying out the options," a bulletin in which they have considered the risks associated with cryptocurrencies and offered regulators around the world three ways to deal with them.

In the document, these have pointed out that the recent collapses of Terra, FTX and other companies have intensified discussions about appropriate responses to the risks associated with it, including regulation. In addition, they have also said that the infection of the industry has not affected traditional markets, but the situation could change and that the "shadow finance" functions of crypto markets have many inherent vulnerabilities.

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The authors of the paper believe that regulators around the world have 3 options to mitigate risks in the sector, including the prohibition of certain types of activities in the industry, its isolation from the TradeFi sphere and the real sector of the economy as well as the application of regulations applicable to the traditional financial sector.

According to the organization's experts, these options are not mutually exclusive and can be combined.

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