The governor of the Bank of Spain, Pablo Hernández de Cos, has called on the country’s governmental authorities to intensify the monitoring, regulation, and supervision of the cryptocurrency market.
According to Hernández de Cos, the action is essential in order to manage the danger presented by the most prominent cryptocurrencies, such as Bitcoin (BTC) and Ethereum (ETH); stablecoins, such as Tether (USDT); and other decentralized services, such as the Decentralized Finance (DeFi) sector.
As part of his speech delivered at the II Observatory of Finance on February 21, Hernández urged for more collaboration at the national and international levels, as well as across institutions, in order to ensure monitoring and further develop regulation of the crypto sector.
While delivering his address, he mentioned some of the advantages that cryptocurrencies offer for the financial industry, such as their ability to enhance payment systems or act as a catalyst for new capabilities. He did, however, underline the dangers they represent to the financial system and, therefore, to the customers within the banking system.
Crypto not subject to bank control
Furthermore, the head of the central bank believes the so-called ‘bitcoinization’ or ‘cryptoization’ threatens to create parallel value transfer circuits since they are not subject to the bank’s control, he said:
“They are not subject to the control of central banks, which limits their ability to contain the materialization of possible systemic risks.”
Due to all of these factors, the governor believes it is vital that the National Securities Market Commission (Comisión Nacional del Mercado de Valores) implement a new initiative, which went into effect on February 17, that controls the advertisement of cryptocurrency assets in Spain.
“This regulation emphasizes precisely the risks associated with these markets, including the possible total loss of the amount invested,” Hernández de Cos said.
Ultimately, his belief is that Spain’s public authorities should step up their monitoring efforts, adding at the present moment the bank’s plans already anticipate allocating privileged space in the following months to some sorts of crypto assets in order to combat fraud.