The regulatory war is heating up... and the Bank for International Settlements report calls for "containing" the risks of digital currencies.

📌 The Bank for International Settlements (BIS) warns of the overlap between traditional financing and crypto, calling for strict regulations which has sparked a heated debate in the corridors of digital and decentralized finance (DeFi), and highlighted what was stated:

1️⃣Digital currencies and DeFi are no longer isolated worlds thanks to developments like crypto ETFs and tokenizing real assets (such as real estate or stocks), a strong bridge has been created connecting the digital economy to the traditional financial system.

2️⃣The report warns that this convergence could transfer risks from the crypto market to the traditional economy. Think of it as a tidal wave: if we don't control it, the entire ship may sink.

3️⃣A call to "contain" risks instead of banning digital currencies (which is impractical and undesirable according to the report), the bank proposes a strict regulatory approach that includes rules like Know Your Customer (KYC), and setting professional standards for operators, to ensure risk control.

4️⃣The report acknowledges that crypto is more transparent than the traditional system thanks to blockchain technology, but it points out that its anonymous nature may encourage investors to take more risks because "reputation" is not at stake.

Fierce reactions:

- Christopher Perkins (CEO of CoinFund): "The report's recommendations are ignorant and dangerous... they will create crises instead of preventing them.

- Michael Egorov (founder of Curve): "Stop this nonsense"

Why should you care as an investor?

✅ The real risk: if these regulations are implemented:

- Innovations in DeFi may choke and reduce investment returns.

- Increase costs on platforms. This reflects on your fees.

How do you protect your portfolio?

- Don't put all your eggs in the DeFi basket: allocate part of your investments to platforms with clear regulation (like Coinbase or Binance).

- Tracking open-source projects: transparent software (like Uniswap) is less susceptible to the "information risk" mentioned in the report.

- Look for currencies that link traditional and digital finance (like Chainlink, Aave).

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In your opinion, will strict regulation kill crypto... or save it from itself?