Crypto is not communism — Exec slams BIS take on crypto

The Bank for International Settlements’ (BIS) recent report advocating for the isolation of crypto markets, along with its stance on DeFi and stablecoins, has drawn sharp criticism from industry leaders, who warn such recommendations could threaten the global financial ecosystem.

Many of the BIS' conclusions were described as uninformed and potentially harmful. Critics argue the BIS' “containment” approach—aimed at separating crypto from traditional finance—is both unrealistic and risky. “Crypto is not communism,” one executive stated, emphasizing that crypto functions like the internet—open, borderless, and beyond centralized control.

Concerns were raised that enforcing isolation would amplify liquidity risks in the traditional financial system. Crypto operates around the clock, unlike traditional markets that close after trading hours, making disconnection impractical and potentially destabilizing.

Critics noted that rather than reducing systemic risk, such policies could inadvertently create it. The BIS report acknowledged that crypto and DeFi have amassed substantial investor interest and capital, making regulatory oversight increasingly urgent.

Opposing the BIS view that DeFi presents major challenges, industry voices argued it offers a significant upgrade over the opaque structures of traditional finance. The issue of developer anonymity was also challenged, pointing out that traditional finance firms rarely disclose developer teams either.

The BIS also suggested that stablecoins might cause macroeconomic instability in vulnerable nations. In response, critics argued that if USD-backed stablecoins bring greater financial access to populations in countries like Venezuela or Zimbabwe, that should be viewed as a positive development.

Another expert likened the BIS report to “writing parking regulations for a fleet of self-driving drones”—a well-meaning effort, but technologically out of step.

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