{"id":127524,"date":"2025-04-19T12:17:13","date_gmt":"2025-04-19T12:17:13","guid":{"rendered":"http:\/\/cryptospotters.net\/?p=127524"},"modified":"2025-04-19T12:17:13","modified_gmt":"2025-04-19T12:17:13","slug":"crypto-defi-may-widen-wealth-gap-destabilize-finance-bis-report","status":"publish","type":"post","link":"http:\/\/cryptospotters.net\/?p=127524","title":{"rendered":"Crypto, DeFi may widen wealth gap, destabilize finance: BIS report"},"content":{"rendered":"<p>Source: Cointelegraph.com NewsThe growing adoption of cryptocurrencies may pose risks to the traditional financial system and exacerbate wealth inequality, according to the Bank for International Settlements (BIS).<br \/>\nIn an April 15 report, the BIS warned that the number of investors and amount of capital in crypto and decentralized finance (DeFi) have \u201creached a critical mass,\u201d with investor protection becoming a \u201csignificant concern for regulators.\u201d<br \/>\nThe size of the crypto market signals that authorities should be worried about the \u201cstability of crypto over and above the role it may have for TradFi and the real economy,\u201d the report states, highlighting the role of stablecoins, which the BIS said have \u201cbecome the means through which participants transfer value within crypto.\u201d<br \/>\nBIS report on crypto and DeFi\u2019s functions and financial stability implications. Source: BISThe report calls for targeted stablecoin regulation on stability and reserve asset requirements that will guarantee the redemption of stablecoins for US dollars during \u201cstressed market conditions.\u201d<br \/>\nRelated: Spar supermarket in Switzerland starts accepting Bitcoin payments<br \/>\nThe report comes two weeks after the US House Financial Services Committee passed the Stablecoin Transparency and Accountability for a Better Ledger Economy, or STABLE Act, with a 32\u201317 vote on April 2.<br \/>\nSource: Financial Services GOPThe STABLE Act aims to create a clear regulatory framework for dollar-denominated payment stablecoins, emphasizing transparency and consumer protection.<br \/>\nOn March 13, the GENIUS Act, short for Guiding and Establishing National Innovation for US Stablecoins, passed the Senate Banking Committee by a vote of 18\u20136. The act aims to establish collateralization guidelines and require full compliance with Anti-Money Laundering laws from stablecoin issuers.<br \/>\nRelated: $400M Web3 investment fund ABCDE halts new investments, fundraising<br \/>\nCrypto may exacerbate wealth gap<br \/>\nThe BIS also raised concerns about how crypto markets may worsen income inequality by enabling larger investors to capitalize on the emotions of less sophisticated retail participants, as seen during the FTX collapse in 2022.<br \/>\nWhale vs retail activity after FTX collapse. Source:\u00a0 BIS\u201cAs prices tumbled in 2022, users actually traded more,\u201d the BIS report noted. \u201cMost disturbingly, large bitcoin holders (\u201cwhales\u201d) were selling as ordinary retail investors (\u201ckrill\u201d) were buying.\u201d It added:<br \/>\n\u201cThis implies that the crypto market, which is often presented as an opportunity for inclusive growth and financial stability, can be a means for redistributing wealth from the poorer to the wealthier.\u201d<br \/>\nThe report concludes that DeFi and TradFi have similar underlying economic drivers, but DeFi\u2019s \u201cdistinctive features,\u201d like \u201csmart contract and composability,\u201d present new challenges that need proactive regulatory interventions to \u201csafeguard financial stability, while fostering innovation.\u201d<br \/>\nMagazine: Uni students crypto \u2018grooming\u2019 scandal, 67K scammed by fake women: Asia Express<a href=\"https:\/\/cointelegraph.com\/news\/crypto-adoption-critical-mass-regulation-wealth-gap-bis?utm_source=rss_feed&amp;utm_medium=rss&amp;utm_campaign=rss_partner_inbound\" target=\"_blank\" class=\"feedzy-rss-link-icon\" rel=\"noopener\">Read More<\/a><\/p>","protected":false},"excerpt":{"rendered":"<p>Source: Cointelegraph.com NewsThe growing adoption of cryptocurrencies may pose risks to the traditional financial system and exacerbate wealth inequality, according to the Bank for International Settlements (BIS). In an April&hellip; <\/p>\n","protected":false},"author":0,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[5],"tags":[],"_links":{"self":[{"href":"http:\/\/cryptospotters.net\/index.php?rest_route=\/wp\/v2\/posts\/127524"}],"collection":[{"href":"http:\/\/cryptospotters.net\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"http:\/\/cryptospotters.net\/index.php?rest_route=\/wp\/v2\/types\/post"}],"replies":[{"embeddable":true,"href":"http:\/\/cryptospotters.net\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=127524"}],"version-history":[{"count":0,"href":"http:\/\/cryptospotters.net\/index.php?rest_route=\/wp\/v2\/posts\/127524\/revisions"}],"wp:attachment":[{"href":"http:\/\/cryptospotters.net\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=127524"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"http:\/\/cryptospotters.net\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=127524"},{"taxonomy":"post_tag","embeddable":true,"href":"http:\/\/cryptospotters.net\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=127524"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}