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Portugal central bank official says crypto is unsustainable in long run

Portugal central bank official says crypto is unsustainable in long run 5

Mário Centeno slammed cryptocurrencies’ ability to sustain operations and appreciated the EU’s MiCA as a better crypto regulatory framework but demanded international collaboration with that regulation on this sector.

Portugal is a country located on the Iberian Peninsula, in Southwestern Europe. Under the current laws, the crypto sector is unregulated in the jurisdiction of this country but people are free to invest in cryptocurrencies. Also, the country’s government acknowledged Crypto’s potential as an alternative means of payment and investment.

On 2 Oct 2023, Mário Centeno, the governor of the central of Portugal, spoke about cryptocurrencies during the 2023 Banco de Portugal Financial Stability Conference. 

Centeno said that international cooperation is necessary to regulate the crypto under a perfect regulation framework, to easily fight against the possibility of “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 stated.

On the Decentralized Finance & long-term life of blockchain networks, the Central Bank official said that he doesn’t believe that it will survive.

Centeno noted that cryptocurrencies grabbed huge popularity during the COVID-19 pandemic and after that saw a big downfall and with that huge numbers of crypto platforms & products collapsed badly. Indeed he indirectly dragged finger toward Terra (Luna), FTX, & several crypto lending platforms which collapsed badly in between 2022 to 2023.

The central bank official praised the European Union’s crypto regulation framework called Markets in Crypto Assets (MiCA) as the best framework to regulate the crypto sector but further insisted on the international consolidation of regulatory efforts under the principle of “same risk, same regulation”. 

In short, Centeno believes that the crypto regulation framework should be the same in all countries and all the countries should follow the same rules to fight against crypto risk challenges.

It is worth it to note that a similar kind of statement was recently passed by Rupert Schaefer, the executive director of strategy, policy, and control at the German Federal Financial Supervisory Authority. Through a blog post, Rupert noted that the EU is moving toward crypto adoption with the MiCA framework but proposed the idea of using the MiCA framework at a global scale.

Read also: IMF proposes 3 steps plan for countries to fight against Crypto

Portugal central bank official says crypto is unsustainable in long run



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