Mário Centeno, at the Banco de Portugal’s Financial Stability Conference on Oct. 2, called for greater international cooperation to create a “robust framework” for crypto regulation, emphasizing the importance of avoiding “regulatory arbitrage“, whereby companies take advantage of differences in regulation across countries.
“It would be short-sighted to believe that regulating and supervising these global risks and international players at the national level will suffice.”
Mário Centeno expressed skepticism about the long-term viability of crypto assets and decentralized finance, highlighting the “undeniable risk” associated with these technologies and questioning the commonly held belief that crypto and DeFi democratize finance, arguing that more viable alternatives are likely to replace them in the future.
“These volatile products experienced an enormous surge in popularity during the COVID-19 pandemic but proved to be unsustainable and, unsurprisingly, culminated in the collapse of several products.”
Mário Centeno praised the European Union’s Markets in Crypto-Assets (MiCA) regulations, the first comprehensive framework for crypto regulation in the region, and called for “same risk, same regulation” to be the guiding principle of global crypto regulation, stressing the need for greater international cooperation.
However, the executive director of strategy, policy, and control at the German Federal Financial Supervisory Authority also recently expressed a similar sentiment, calling for more global coordination on crypto regulation in a recent blog post where Rupert Schaefer acknowledged the progress made by the EU with the adoption of MiCA but also pointed out the inconsistent approach to crypto regulation on a global scale, calling for more harmonization of rules and standards.
During the annual G20 summit in August, Indian Prime Minister Narendra Modi also stressed the need for global collaboration on crypto regulation. His comments add to the growing chorus of world leaders calling for more consistent and harmonized crypto regulations.