Quick Summary:
- BIS Calls for Crypto Isolation: A new BIS report advocates for stricter separation between digital assets and traditional finance.
- CoinFund’s President Responds: Christopher Perkins calls the move “dangerous” and “uninformed.”
- Industry Fears Misguided Policy: Critics say the containment strategy could increase—rather than reduce—systemic risk.
- DeFi and Stablecoins Defended: Crypto leaders argue these innovations offer transparency and financial inclusion.
- US May Ease Crypto Enforcement: Regulatory priorities expected to shift under Trump’s upcoming administration.
BIS vs. Blockchain: A Risky Disconnect?
The Bank for International Settlements (BIS) is under fire after releasing its April report pushing for a stricter divide between cryptocurrencies and traditional finance. Titled “Cryptocurrencies and Decentralized Finance: Functions and Financial Stability Implications”, the report recommends a “containment” strategy to manage crypto’s perceived risks.
But not everyone agrees.
Christopher Perkins, president of blockchain investment firm CoinFund, blasted the BIS’s stance as “dangerous” and fear-driven. He argues the strategy shows a fundamental misunderstanding of crypto’s role in the future of finance.
“Crypto is not communism. It’s the new internet,” Perkins said on X. “You cannot control it any more than you control the internet.”
Containment Could Backfire
Perkins warned that cutting off crypto from traditional finance could actually increase global financial instability. Crypto markets operate 24/7—unlike traditional markets—which makes them a vital liquidity source. Policies that isolate them might spark the very risks they aim to prevent.
“If implemented, these policies will cause—not mitigate—systemic risk,” he said.
He also pushed back on the BIS’s claim that stablecoins threaten monetary policy in nations like Venezuela and Zimbabwe. According to Perkins, stablecoins may offer real financial benefits in struggling economies.
Tech Experts Join the Chorus
CoinFund isn’t alone in its criticism. Christian Catalini, co-founder of Lightspark, described the BIS report as outdated and disconnected from crypto’s fast-moving nature.
“It’s like writing parking regulations for self-driving drones — earnest work, two technological leaps behind,” Catalini posted.
US Crypto Crackdown May Cool Off
Meanwhile, the U.S. crypto community might catch a break. With President-elect Donald Trump heading back to office, legal experts expect the Justice Department to shift focus toward immigration enforcement—pulling resources away from crypto-related prosecutions.
Scott Martin, a top official at the U.S. Attorney’s Office in Manhattan, hinted at fewer crypto crime cases ahead.
Final Thoughts
As regulators tighten their grip on crypto globally, industry leaders warn that overreaction could stifle innovation and harm global financial stability. Whether the BIS will reconsider its “containment” approach remains to be seen—but the message from the crypto world is clear:
don’t underestimate the power of decentralized finance.