bank of portugal cryptocurrencies

The Bank of Portugal speaks out on cryptocurrencies and financial stability

  • The conference addresses the volatility of cryptocurrencies and the need for global regulation for these digital assets.
  • The importance of the climate transition is discussed as a critical factor in the new financial scenario.

The Bank of Portugal begins its 2023 Financial Stability Conference, where an audience gathers in search of answers to the problems facing the financial world.

In this fifth edition of the event, the main focus revolves around the coordination of economic policies, bringing together policy experts, academics and professionals to discuss issues that influence global financial stability.

And due to the increase in adoption, one of the focal points has been cryptocurrencies and decentralized finance (DeFi) in the current financial scenario. The Bank of Portugal has raised crucial questions about the viability and regulation of these digital assets.

The words of the Bank of Portugal

In his statements, emphasis has been placed on the extreme volatility that has characterized cryptocurrencies in recent years.

Despite their surge in popularity during the pandemic, cryptocurrencies have also seen significant crashes. This volatility has created uncertainty over whether these digital products are a sustainable addition to the financial market.

The Bank of Portugal has mentioned the implementation of MiCA, the European Union Cryptoasset Markets Regulation, as an initial step towards a more complete regulation of this market.

However, it has highlighted the need for greater coordination at the international level to address the fragmented regulatory framework surrounding cryptocurrencies.

Other important issues at the conference

In addition, the conference also discussed the climate transition in the new financial landscape. In fact, the Bank of Portugal has highlighted that climate-related risks have a global scope and can represent a source of systemic risk. Which proposes global cooperation and coordination to address these risks.

At the same time, it has emphasized the need for complementary macroprudential tools to address environmental risks in the financial sector. It proposes a comprehensive approach by regulators and supervisors to ensure financial stability in a world facing increasingly pressing climate challenges.

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