Increasing adoption of cryptocurrency can lead to risk to traditional financial system and can increase wealth inequality according to Bank for International Settlements (BIS).
On 15 April ReportThe BIS warned that the number of investors in Crypto and Decentralized Finance (DEFI) has “reached a significant mass,” with investor protection has become an important concern for regulators “.
The size of the crypto market indicates that authorities “should be concerned about the stability of the crypto and the role for the trade and the role for the real economy,” said in the report, the report states, which highlights the role of Stabecoin, which BIS said that “that has become a means through which the price moves within the Crypto.”
The report will guarantee stablecoin regulation on stability and reserved asset requirements which will guarantee the redemption of stabecrims for the US dollar during “stressed market conditions”.
Connected: Spar Supermarket in Switzerland starts accepting bitcoin payments
The report came two weeks after the US House Financial Services Committee on April 2, a better laser economy with 32–17 votes, or two weeks after passing the Stabelcoin transparency and accountability for the stable Act.
The stable Act aims to create a clear regulatory framework for stabecoin, emphasizing transparency and consumer protection.
On 13 March, the Genius Act, small to guide and establish national innovation for US Stabechines, pass Senate Banking Committee by 18-6 votes. The purpose of the Act is to establish collateral guidelines and require complete compliance of anti-mani laundering laws from stabechoin issuers.
Connected: $ 400m Web3 Investment Fund Abcde stops new investments, funds raising
Crypto can increase money gaps
The BIS also expressed concern how the crypto markets can spoil income inequality by enabling big investors to redeem the feelings of low -refined retail participants, as seen during FTX Fall in 2022.
The BIS report states, “As prices rose in 2022, users actually did more trading.” “The most distracted, large bitcoin holders (” whales “) were buying ordinary retail investors (” krill “).” Added to:
“This means that the Crypto market, which is often presented as an opportunity for inclusive growth and financial stability, can be a means to rebuild money from the rich to the rich.”
The report concludes that DEFIs and trades have the same underlying economic driver, but the “specific features” of DEFI, such as “Smart Contract and Composibility,” present new challenges, which require active regulatory intervention to protect financial stability “promoting innovation.
https://www.youtube.com/watch?v=kqzhvt777xkw
magazine: Uni Students Crypto ‘Grooming’ scandal, 67k scam by fake women: Asia Express