Although it would be an "attractive option" to let the crypto industry collapse onto itself, the crypto industry is here to stay despite the market downturn, or "crypto winter," said Steven Maijoor, executive director of supervision of the Dutch central bank and chair of the Financial Stability Boards's crypto working group.
"Crypto is here to stay and regulators need to set a path for supervising the sector," Maijoor said, speaking at the Bank for International Settlements Summit on Tuesday.
The past year has been tumultuous for the crypto sector, seeing major crashes, including Terra's stablecoin collapse, the FTX debacle, and most recently the unravelling of crypto-friendly banks such as Silicon Valley Bank, Signature and Silvergate. Despite this series of events, there is growing interest in both digital assets and their underlying technology.
Traditional finance players as well as consumers are interested in getting involved in the sector, making regulation — and therefore legitimization — necessary, Maijoor said. Despite jurisdictions taking measures to regulate the sector around the world, crypto will remain a high risk for the next few years, he added.
"There is detriment for consumers, but it's not for us as regulators to judge if this will be a successful new technological development, but to only control the negatives," he said.
The FSB's recommendations on global crypto regulation standards will be published in the summer, following the call for industry and expert input on policy recommendations from October, the crypto working group chair noted.
The policy recommendations stem from a principle of "same risk, same regulation." Maijoor noted that jurisdictions will need to be incentivized to implement the rules proposed by the FSB.
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