ECB Board Member Believes Crypto Companies Need to Be Supervised
Elizabeth McCaul, a member of the supervisory board of the European Central Bank (ECB), has urged for greater supervision of crypto firms that operate across borders outside traditional regulatory oversight.
In a blog post on April 5, McCaul emphasized that there is currently no adequate regulatory or supervisory framework for crypto firms. However, the collapse of FTX exchange has shed light on the issue, and she called on policymakers to address potential gaps in existing frameworks that could lead to bank failures. She cited the collapses of Silicon Valley Bank and Signature Bank in the United States as examples.
McCaul highlighted that in the crypto world, the very concept of borders and jurisdictions is being challenged, making it difficult to supervise firms that have no physical borders. She urged policymakers to imagine what international coordination would look like and how it could be effective in regulating the crypto world.
The Financial Stability Board and the Basel Committee on Banking Supervision have proposed a framework governing crypto, which is expected to go into effect in 2025, according to McCaul. However, she believes that pending laws, such as the Markets in Crypto-Assets framework, could complement those from the BCBS in Europe but are unlikely to completely address the supervision of crypto firms without headquarters.
