On Thursday (May 12), Pablo Hernández de Cos, chair of the Basel Committee on Banking Supervision and governor of the Bank of Spain, warned that fast-paced developments in decentralized finance (DeFi) and crypto assets necessitate a proactive and forward-looking regulatory and supervisory approach.
In a speech delivered at the 36th Annual General Meeting of the International Swaps and Derivatives Association in Madrid, Hernández de Cos suggested that while crypto assets and DeFi still represent less than 1% of total global financial assets and banks’ exposures are relatively limited, an appropriate response is to bring these areas within the relevant regulatory perimeter.
“Despite our better understanding of crypto assets and DeFi, the jury is still out when it comes to ascertaining how best to harness their oft-cited promises and benefits, while mitigating their risks and safeguarding financial stability,” Hernández de Cos said.
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