Head of Portugal Central Bank deems crypto unsustainable, calls for global regulation

Mário Centeno, the Governor of Banco de Portugal, joins a chorus of regulators, claiming that national efforts to oversee crypto wouldn’t work correctly without a global framework. 

In his opening speech at the 2023 Banco de Portugal Financial Stability Conference on Oct. 2, Centeno called for international cooperation to set up a “robust framework” and avoid the possibility of “regulatory arbitrage”:

“It would be short-sighted to believe that regulating and supervising these global risks and international players at the national level will suffice.”

Speaking of crypto assets and decentralized finance (DeFi), Centeno mentioned the “undeniable risk” of their inviability in the long run. The official expressed his disbelief in the democratizing potential of digital assets and even their ability to ultimately survive: 

“These volatile products experienced an enormous surge in popularity during the Covid-19 pandemic, but proved to be unsustainable and, unsurprisingly, culminated in the collapse of several products.”

Centeno praised the European Union’s first comprehensive crypto framework, Markets in Crypto Assets (MiCA), but insisted on further international consolidation of regulatory efforts under the principle of “same risk, same regulation.” 

Related: Brazil’s crypto surge prompts central bank to tighten regulation

Roughly the same sentiment was recently expressed by the executive director of strategy, policy and control at the German Federal Financial Supervisory Authority (BaFin). In his blog post, Rupert Schaefer acknowledged the apparent progress in regulating crypto with MiCA adoption in the EU but prompted about the inconsistencies existing on a global scale.

In August, Indian Prime Minister Narendra Modi also called for global collaboration on formulating crypto regulations during the annual Group of 20 (G20) summit.