Portugal’s central bank chief calls for global crypto regulations

• Centeno stressed the need for international cooperation to establish a robust regulatory framework.
• He also expressed skepticism about the democratizing potential of digital assets.

The Head of Banco de Portugal, Mário Centeno, joined the growing chorus of regulators advocating for global cryptocurrency regulation. He emphasized that a national approach was insufficient to address the challenges posed by the crypto industry.

During his opening speech at the 2023 Banco de Portugal Financial Stability Conference on 2 October, Centeno stressed the need for international cooperation to establish a robust regulatory framework. He also commented on preventing regulatory arbitrage that could exploit national-level regulations.

Centeno also addressed the crypto assets and decentralized finance (DeFi) space. He highlighted what he termed the undeniable risk of their long-term sustainability. He also expressed skepticism about the democratizing potential of digital assets and even questioned their survival.

International co-operation for regulation encouraged

While crypto assets experienced a surge in popularity during the COVID-19 pandemic, Centeno argued that they proved to be unsustainable and ultimately led to the collapse of several crypto products.

He commended the European Union’s (EU) first comprehensive crypto framework, known as the Markets in Crypto-Assets (MiCA) regulations. However, he also called for further international consolidation of regulatory efforts. Centeno emphasized the importance of the principle “same risk, same regulation” in guiding global cryptocurrency regulations.

This call for international collaboration echoes sentiments expressed by Rupert Schaefer, the executive director of strategy, policy, and control at the German Federal Financial Supervisory Authority. Schaefer acknowledged the progress made in regulating cryptocurrencies with the adoption of MiCA in the EU. However, he highlighted the inconsistencies in global crypto regulations.

In August, Indian Prime Minister Narendra Modi also advocated for global cooperation in shaping crypto regulations during the annual G20 summit.

He emphasized the importance of embracing and harmonizing technological advancements. Additionally, Modi urged for a unified approach to crypto regulation that transcends national boundaries. He cited the aviation industry as an example of common global rules and regulations and advocated for similar global standards in the crypto sector.

Under India’s G20 presidency, discussions went beyond financial stability concerns and considered the broader impact on emerging markets and developing economies, leading to a consensus on crypto-related issues.