German Finance Authority: Crypto Regulation to Focus on Market Stability, Not Individuals
Felix Hufeld, President of the Federal Financial Supervisory Authority in Germany (BaFin), said the essential part of his regulatory authority isn’t singular speculator assurance, yet the protection of general financial stability, Cointelegraph auf Deutsch.
Even though BaFin’s role is to ensure purchasers and keep up general financial market soundness, Hufeld expressed that it can just address fundamental dangers, and can’t protect each investor from “his fate.” Hufeld clarified:
“That’s why we warned ICOs last November, pointing out the high price volatility of crypto-tokens. We will not be able to protect every single investor from his fate, and that cannot be the task of state supervision. Once again, the maximum is that we must act prudently or regularly if financial stability as a whole is threatened or if consumers are systematically harmed.”
While Hufeld portrayed blockchain innovation as troublesome, he included that its actual potential stays to be seen at some point later on. He reviewed the well-known misinterpretation of the then Microsoft CEO Bill Gates in 1991, in which Gates depicted the Internet as misrepresented publicity, just to perceive the limitless open doors a couple of years after the fact.
Hufeld did not definitively answer the topic of whether Bitcoin and blockchain are just being hyped or a force that could essentially change financial markets. Generally, Hufeld drew a moderately positive picture of blockchain innovation:
“The disruptive potential of this technology, however, goes beyond saving costs. Completely new business models could emerge that neither you nor I think of today. And every day, many people are working to find further uses for the blockchain and to use the technology over a large area.”
Hufeld stays wary of cryptocurrencies, saying that their potential use in empowering money laundering and terrorist financing is a ‘’worst case’’. He included that BaFin ought to participate and work together with different regulators worldwide and make progress toward “worldwide “global standards and internationally agreed on supervisory standards”.
In April, Hufeld called for cautious regulations on cryptocurrencies in the opening discourse of the BaFin-Tech 2018 conference. He said that blockchain regulations must restrict dangers without reducing the open doors it brings.
