Mário Centeno, the governor of Banco de Portugal, has joined a growing number of regulators who argue that effective oversight of cryptocurrencies cannot be achieved at the national level alone and necessitates a global framework. During his opening speech at the Banco de Portugal Financial Stability Conference on October 2, 2023, Centeno emphasized the need for international cooperation to establish a robust regulatory framework and prevent the risk of regulatory arbitrage. He said that it would be shortsighted to assume that regulating and supervising these global risks and international players solely at the national level would be sufficient.
Centeno discussed crypto assets and decentralized finance, highlighting the undeniable risk of their long-term sustainability. He expressed skepticism about the democratizing potential of digital assets and even questioned their ability to survive in the long run. He said that these volatile products experienced a significant surge in popularity during the COVID-19 pandemic but were proven to be unsustainable, ultimately leading to the collapse of several products.
Centeno commended the European Union’s initial comprehensive crypto framework, the Markets in Crypto-Assets (MiCA) regulations, but stressed the importance of further international coordination of regulatory efforts based on the principle of the same risk, same regulation. Similar sentiments were recently expressed by the executive director of strategy, policy, and control at the German Federal Financial Supervisory Authority. In a blog post, Rupert Schaefer acknowledged the progress made in regulating cryptocurrencies with the adoption of MiCA in the EU but raised concerns about the existing inconsistencies at the global level.
In August, Indian Prime Minister Narendra Modi also called for global collaboration in formulating cryptocurrency regulations during the annual G20 summit.
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