BIS economist recommends “technology neutral” crypto regulation, low-cost oversight of decentralized markets – Bitcoin Regulation News

An economist at the Bank for International Settlements has discovered that cryptocurrencies are not in demand as an alternative to fiat currencies or regulated finance. Therefore, “technology neutral regulation for this asset class” is recommended. The economist referred to “integrated supervision”, adding that “the main objective is low-cost supervision of decentralized markets”.

BIS economist suggests regulatory approach for cryptocurrencies

The Bank for International Settlements (BIS) on Thursday released a discussion paper on “The Socio-Economic Drivers of U.S. Cryptocurrency Investments.” It is written by Raphael Auer, Senior Economist for Innovation and the Digital Economy at BRI, and David Tercero-Lucas from Universitat Autònoma de Barcelona (UAB).

In the 52-page report, the authors state that, based on an in-depth analysis of representative data on crypto owners:

We refute the hypothesis that cryptocurrencies are sought after as an alternative to fiat currencies or regulated finance … Cryptocurrency investors don’t care more about liquidity security or commercial banking than the rest of the world. population.

The study also found, “Cryptocurrency investors tend to be educated, young and male. People who have experience using digital finance are more likely to invest in cryptocurrencies. “

Noting that investors continue to view cryptocurrencies as “an object of niche digital speculation,” the authors detailed that “a clarifying regulatory and supervisory framework for cryptocurrency markets could be beneficial to the industry. “. They added:

From a policy perspective, the general conclusion of our analysis is that, since the objectives of investors are the same as those of other asset classes, so too should regulation.

The report points out that “better regulation can also be beneficial – the quintessential in fact – for the industry”.

It then discusses the application of “technologically neutral regulation to this asset class, while exploiting the potential of the technology itself in the supervisory process”. The authors suggested:

One promising option that supervisory and regulatory agencies could pursue is “integrated supervision”… The primary focus is low-cost supervision of decentralized markets, which may be particularly relevant amid recent deliberations on the need for supervision. adequate prudential oversight of the cryptocurrency industry.

By integrated supervision, “we mean the implementation of a supervisory framework for cryptocurrencies that automatically monitors compliance by reading the market ledger,” the report said.

What do you think of the findings of the BIS report? Let us know in the comments section below.

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