Bank of Spain warns about the use of crypto

The Bank of Spain has just published a new report on the popularity of the use of crypto and the possible effects it could have on the nation’s financial stability.

Bank of Spain report, warning about crypto

A recent report from the Central Bank of Spain, an institution led by Pablo Hernandez da Cos, warns Spanish people of the risks associated with the use of cryptocurrencies, which are becoming increasingly popular in the Iberian country. 

The report is the result of a detailed three-month study conducted by the Bank’s experts to understand what impact a sustained adoption of cryptocurrencies would have on the country’s financial stability. 

Already at the end of February, Governor Hernandez da Cos had stated that the financial mix between traditional services and digital assets was very risky. 

Considering these potential risks, the governor said that public authorities should be obliged to intensify monitoring, regulation and supervision of the cryptocurrency market. 

In addition, all financial institutions offering crypto services should provide warnings about the associated risks with the utmost diligence.  

According to the newly published report:

“This work, in order to be effective and efficient, must be carried out with close cooperation, both international and inter-institutional, so as to avoid issues”.

The cryptocurrency market is considered to be still very limited, but its exponential growth could pose a systemic risk to the global economy.

The report concludes with an analysis of the relentless growth of stablecoins that could pose a serious risk due to their lack of transparency regarding cash reserves. 

Crypto regulation according to Panama

Meanwhile, in Panama, a bill on cryptocurrencies, presented by MP Gabriel Silva in September 2021, is currently being debated at second reading in the National Assembly, with the aim of finding a first clear regulation for the sector.

The proposal, approved in the first round of debate, is now facing a second examination based on some changes made to the original text. 

One of these changes would be linked to the need to incorporate more digitization into the state machine and its offices precisely through the use of blockchain technology: 

“Expand the digitalization of the State by promoting the use of distributed ledger technology and blockchain in the digitalization of the identity of natural and legal persons in or from the Republic of Panama and as a means to make the public function transparent”.

Crypto and the Brazilian Parliament

Yesterday, the Brazilian Parliament finally approved, at least in the Senate, its bill to regulate the crypto sector. Now the bill will have to pass the House and if approved (certainly by the end of 2022) after President Jair Bolsonaro signs it, it will become law. 

The decision was greeted with great enthusiasm by its proposer, MP Aureo Ribeiro.

Ribeiro had first submitted the text to parliament back in 2015, commenting then:

“I want to congratulate the author of the draft, Senator Irajá, on the approval, here in the plenary of the Senate, of this important bill”.

The MP also wished to comment on the historic decision of the Brazilian Senate with a tweet rewarding his long effort to reach this milestone.

Mais um passo importante para o desenvolvimento do nosso país! O PL de Criptoeconomia foi aprovado no @SenadoFederal.

Agradeço ao @irajasenador, relator do projeto, pelo trabalho realizado.

Seguimos! #Cripto #Criptoeconomia #Bitcoin #Litecoin #Ethereum pic.twitter.com/sce7N8JSRq

— Aureo Ribeiro (@AureoRibeiroRJ) April 27, 2022

Among other things, the bill provides for easier access for those wishing to install mining farms on Brazilian soil, with the proposal to offer a total tax exemption for interested companies. 

In addition, the bill provides for stricter regulation to combat fraud and criminals who exploit cryptocurrency technology.