- Through the Financial Stability Report, the Bank of Spain has warned the Spanish population of the risks associated with the use of cryptocurrencies.
- The governor of the banking institution, Pablo Hernandez da Cos, pointed out that mixing traditional services with digital assets would simply be risky, not to say catastrophic.
- The bank’s governor called on public authorities, urging them to intensify both regulation and monitoring and supervision of the crypto market.
Crypto assets are here to stay, more and more countries or cities decide to give way to modernity and accept initiatives related to this type of digital money.
However still there are nations that are reluctant to take such an important step as El Salvador did, for example, since they see the other side of the coin and they see a potential risk in letting this type of virtual money enter their economies.
The most recent case in this regard is Spain. The Central Bank of the European country recently published a report about the notorious fame of crypto assets, but, above all, about their possible negative effects on your financial stability.
Bank of Spain warns about cryptocurrencies
In the report entitled Financial Stability Report (Spring 2022) the Central Bank of Spain issues a series of warnings to Spanish citizens about the latent risks linked to the use of crypto assets, same that every day gain more popularity in the nation led by Pedro Sánchez Pérez-Castejón.
This report is the result of a three-month in-depth study conducted by Bank experts, with the clear purpose of detecting and understanding the impact that a sustained adoption of crypto assets would have on the financial stability of Spain.
In fact, at the end of last February, the governor of the banking institution, Pablo Hernandez da Cos, stated that the result of mixing traditional services with digital assets would simply be risky, not to say catastrophic.
Due to the possible risks of serious damage to the Spanish economy, The bank’s governor called on public authorities, urging them to intensify both regulation and monitoring and supervision of the crypto market.
Likewise, he pointed out that all financial institutions that provide their users with crypto services should be obliged to warn them about the risks associated with this type of asset.
“This objective, in order to be completely effective and efficient, must be carried out through close cooperation, both international and inter-institutional, in order to prevent any type of problem.”, states the report.
A young and unknown market
One of the main concerns of the Spanish bank is that, from its perspective, the crypto market is still very young, and therefore very limited in various areas and sections.
However, the sustained growth they have had in recent years has not gone unnoticed, but their exponential growth could represent a systemic risk for the international economy.
The report ends with an analysis of the development of stablecoins, since, according to the document, these could represent a serious risk, due to their lack of transparency regarding cash reserves.
Panama
Meanwhile, in Panama, a debate is currently taking place in the second reading in the National Assembly, on a bill related to digital assets.
Said legislative proposal was presented by deputy Gabriel Silva last year, with the firm purpose of achieving the first regulation for said sector.
The proposal, which has already been approved in the first round, is currently facing an examination based mainly on changes made to the original text.
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