Don't sleep on crypto
It’s safe to assume crypto and decentralised finance were not at the top of the list of Michele Bullock's priorities as she took the reins at the RBA today. But warnings from global regulators suggest it's not something to sleep on.
It’s safe to assume that when Michele Bullock took the reins at the RBA today, decentralised finance (DeFi) and crypto ranked somewhere below interest rates and housing in her list of priorities. But a deluge of warning shots from global regulators over the past couple of weeks suggest it is something she shouldn’t ignore.
The International Monetary Fund and the Financial Stability Board, at the request of the Indian G20 Presidency, recently laid out a series of recommendations for how to manage the macroeconomic and financial stability risks from crypto markets and DeFi.
The global regulator, the Bank for International Settlements, has also sprung into action following the crypto turmoil of 2022, saying it “exposed a number of vulnerabilities in relation to DeFi, including operational fragilities and liquidity and maturity mismatches, as well as issues relating to leverage and interconnectedness”.
And in Australia, the Senate Committee on Economics Legislation recently debated and knocked back a cryptocurrency bill introduced by Liberal senator Andrew Bragg that aimed to make the country more welcoming for crypto and other DeFi plays.
