Pablo Hernandez de Cos is the governor of the Bank of Spain. He has warned again about cryptocurrency and the rapid growth of the crypto market. Hernandes De Cos said that while the crypto market is still small on a global level, it is now larger than subprime mortgages prior to the 2008 financial crisis. And its connections with traditional finance continue growing.
The Governor of the Bank of Spain warns against expanding crypto
The Bank of Spain’s governor has warned of the dangers of allowing cryptocurrency markets to mix with traditional financial institutions. Pablo Hernandez de Cos closed the event by explaining that the interconnection between these unregulated market and traditional financial institutions has increased because of the large number trading instruments launched during the bull market. This includes futures and ETFs.
Hernandez De Cos stated in this context that “some large, private companies publically announced their interest using crypto assets to cash management while others campaigned in favor of it.” This has led the Bank of Spain governor to warn about the potential instability this inclusion of crypto variables could cause in Spain.
Growth of the market and its dangers
The Spanish cryptocurrency market has grown at an exponential rate, with some estimates estimating that it could be worth more than 60 billion euros ($64 trillion) in crypto-related transactions. This was also mentioned by the Bank of Spain’s governor, who stated that the market is already bigger than the subprime mortgages market in the wake of the global financial crisis.
Hernandez de Cos also explained that some of the most valuable assets such as bitcoin, ethereum and tether are trading volumes close to those traded on the New York Stock Exchange during certain sessions. The governor believes these markets should be regulated quickly due to the volatility of certain crypto assets.
Hernandez de Cos explained:
The Financial Stability Board (FSB), recently highlighted that these markets, if they are not properly regulated or supervised, could quickly reach a tipping-point.
The Bank of Spain warns about the dangers associated with crypto trading in traditional markets. This is not the first warning. The Bank of Spain also published a report in April that highlighted the risks associated with crypto and traditional markets.
