Some of the world’s top central bankers today emphasized the need for introducing basic regulations for cryptocurrencies, but they remained equally wary that new rules could lend legitimacy to an industry that has been very unstable over the past year.
The central bank chiefs agreed on the need for a basic level of crypto regulation, covering anti-money laundering and ‘know your customer’ checks on crypto assets, but were sceptical about going further.
Tharman Shanmugaratnam, chairman of the Monetary Authority of Singapore, said that regulation might legitimise something “inherently speculative and, in fact, slightly crazy”.
He said it was better to warn potential investors that investing in cryptocurrencies “is a risk you take at your own expense”.
This sentiment was shared by François Villeroy de Galhau, the governor of the Central Bank of France, who said the basics of regulation – including anti-money laundering and investor protections – “should be applied to all cryptos”.
Colm Kelleher, chair of UBS, said if an asset cannot get over the “basic hurdle” of anti-money laundering checks then crypto companies “cannot justify selling that product as its currently constituted”.
The discussion echoed similar debates taking place in Britain, where City minister Andrew Griffith said he was concerned about the potential for regulation to create a “halo effect” around crypto assets.
“That is a big concern, and it is one reason why we are taking our time and trying to get the balance right,” he told the Treasury Committee last week.