BaFin’s top executive stresses the risks of crypto and calls for global regulation to apply to all financial centers — without exceptions.
While the European Union has made significant progress toward regulating crypto by approving its comprehensive framework, Markets in Crypto-Assets (MiCA), the need for global regulation still remains, according to a top executive of the German Federal Financial Supervisory Authority (BaFin).
In a blog post on Sept. 18, Rupert Schaefer, executive director of strategy, policy and control at BaFin, highlighted the importance of unitary global regulation of the crypto industry.
Citing the unfortunate example of the FTX crypto exchange, Schaefer compared regulators to air traffic control and “some crypto assets and decentralized finance projects” to unidentifiable flying objects.
Related: Germany’s blockchain funding increases 3% amid market downturn
Schaefer acknowledged the obvious progress in regulating crypto with MiCA adoption in the EU, the Financial Stability Board’s and the International Association of Securities Commissions’ sets of recommendations, as well as the Basel Committee’s new international supervisory standard for treatment of crypto asset exposures.
However, the official reminded us about the inconsistencies existing on a global scale and where there is still a place for exceptions from the global regulatory push:
“Now the common principles must be implemented consistently and consistently worldwide. There should be no white spots in the flight radar; the global rules should also apply to niche financial centers.”
The same sentiment was recently expressed by Indian Prime Minister Narendra Modi, who pushed for global collaboration on formulating crypto regulations among G20 member states.
Meanwhile, in Germany, as in a number of other European markets, the crypto and blockchain sector became a leader among fintech companies in investments during the first half of 2023.
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