WEF Global Banking Panel Seeks Strong Crypto Regulation in Davos 2023

WEF Global Banking Panel Seeks Strong Crypto Regulation in Davos 2023            

A group of global banking experts hosted by the World Economic Forum (WEF) convened to discuss the need for global crypto regulation, including stablecoins and unbacked crypto assets. The panel agreed on some kind of base regulation for the assets and bank-equivalent regulation for blockchain applications seeking to offer financial products along the lines of traditional finance and banking institutions.

WEF Bankers Discuss Crypto Markets

Global bankers have agreed on the need for strong regulations for cryptocurrencies. In a panel discussion titled "Banking in the Eye of the Storm" during the Davos 2023 meetings of the World Economic Forum (WEF), directives of central and private banks were used to review the cryptocurrency market of 2022, including the fall of cryptocurrency exchange FTX.

François Villeroy de Galhau, governor of the Central Bank of France, explained that regulation for crypto markets was key to controlling the possible damage to investors in the future. Villeroy de Galhau stated:

"The question is not whether we need to regulate or not. We need to regulate. Some even argue that it is a question of prohibiting rather than regulating.”

Villeroy de Galhau also pushed for the alliance of central banks and private banking institutions to partner in promoting innovation, including the adoption of CBDCs (central bank digital currencies).

The governor of the Central Bank of France also expects the implementation of the finalized Basel Committee rules in all jurisdictions, which were approved in December, and the issuing of new directives on crypto assets to banks.

Implementing Base Level Regulation

While all panelists agreed on the need for at least a minimal level of regulation, including anti-money laundering (AML) and know-your-customer (KYC) measures for all assets, Tharman Shanmugaratnam, senior minister of Singapore, stated that some assets would be better off unregulated.

However, he clarified that any cryptocurrency and blockchain technology offering financial products similar to banks, including stablecoins, should be regulated along the lines of traditional financial and banking institutions.

Shanmugaratnam believes the linkage of local, domestic systems with global payment systems could be the answer for banks to crypto and blockchain innovation. It will help immigrants and SMEs, which are currently being served by cryptocurrency alternatives.

What is your take on the opinion of the bankers’ panel on cryptocurrency regulation? Please post your comments.