The increasing adoption of encrypted currencies may pose risks to the traditional financial system and exacerbate wealth, according to the bank for international settlements (BIS).
In a report on April 15, BIS warned that the number of investors and the amount of capital in encryption and decentralized financing (Defi) had “reached a critical bloc”, as the protection of investors became “a great concern for organizers.”
The volume of the encryption market indicates that the authorities should be concerned about “the stability of encryption above the role that may be for Tadfi and the real economy,” says the report, with highlighting the role of Stablecoins, which BIS said “has become” the means through which the participants convey value in Crypto. “
The report calls for the target stablecoin organization on stability and the requirements of the reserve assets that will ensure Stablecoins for the US dollar during “stressful market conditions”.
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This report comes two weeks after the Stablecoin Financial Services Committee approved the Stablecooin transparent and accountability for a better economy for the professor’s book, or a stable law, with a vote 32-17 on April 2.
The stable act aims to create a clear organizational framework for the payment provided in dollars, while emphasizing transparency and consumer protection.
On March 13, the Genius Act, which was shortened to direct and create the national innovation of US Stablecoin, passed the Senate Banking Committee with a vote from 18 to 6. The law aims to create guidance guidelines and requires a complete compliance with the anti -money laundering laws from Stablecoin.
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The encryption may exacerbate the wealth gap
BIS also raised concerns about how to worsen the encryption markets by enabling the largest investors to benefit from the feelings of the least developed retail participants, as it appears during the FTX collapse in 2022.
“With the decline in prices in 2022, the users were already traded,” the BIS report. “The most anxious, bitcoin holders (” whales “) were selling as ordinary retail investors (” krill “). He added:
“This means that the encryption market, which is often presented as an opportunity for comprehensive growth and financial stability, can be a way to redistribute wealth from wealthy to the wealthy.”
The report concludes that Defi and Tradfi have two similar economic engines, but the “distinctive features” of Defi, such as “smart nodes and the ability to synthesize”, represent new challenges that need proactive organizational interventions “the financial stability list, while enhancing innovation.”
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Source: https://cointelegraph.com/news/crypto-adoration-critical-mass-realth-PLEAL- GAP-BIS?