Mário Centeno, the Governor of Banco de Portugal, has joined the growing number of regulators advocating for a global framework to regulate cryptocurrencies effectively. In his opening speech at the 2023 Banco de Portugal Financial Stability Conference on October 2, Centeno emphasized the need for international cooperation to establish a robust regulatory framework and prevent regulatory arbitrage:
“It would be short-sighted to believe that regulating and supervising these global risks and international players at the national level will suffice.”
Centeno specifically addressed cryptocurrencies and decentralized finance (DeFi), highlighting the undeniable risk of their long-term viability. He expressed skepticism about the democratizing potential of digital assets and even their ability to survive:
“These volatile products experienced an enormous surge in popularity during the Covid-19 pandemic but proved to be unsustainable and, unsurprisingly, culminated in the collapse of several products.”
While Centeno commended the European Union’s comprehensive crypto framework, Markets in Crypto Assets (MiCA), he stressed the need for further international consolidation of regulatory efforts, guided by the principle of “same risk, same regulation.”
This call for international cooperation echoes similar sentiments expressed by regulators and leaders from various countries, all emphasizing the importance of a coordinated global approach to crypto regulation. Recognizing cryptocurrencies as a global challenge highlights the necessity of harmonized rules to effectively address their potential risks and benefits.