• Belgian Central Bank Governor Pierre Wunsch called the crypto “implosions” of last year “good news in themselves for us.”
• The bank celebrated the fact there was “little” in the way of “contagion from the crypto market” to “the equity markets.”
• Last year, the government introduced a rule that obliges all exchanges and wallet providers to register with the regulatory Financial Services and Markets Authority (FSMA).
Belgian Central Bank Governor Says Crypto Winter Was ‘Good News’
The Belgian Central Bank Governor Pierre Wunsch said his organization celebrated the 2022 slump in crypto prices, calling last year’s onset of crypto winter “good news for us.” He stated that it had been “concerned about the growing importance of cryptocurrency investments due to their potential impact on financial stability” but noted that “the crashes ultimately took place without any impact on financial stability. So the problem solved itself.”
Little Contagion from Crypto Market
In its review of the Financial Year 2022, the bank celebrated that there was “little” in terms of contagion from crypto market to traditional equity markets. Wunsch also added that cryptos shared strong similarities with financial bubbles of past and called their valuation as highly speculative.
Government Rules on Exchanges and Wallet Providers
The media outlet also pointed out that central banks are not a neutral party when it comes to cryptocurrencies because they are working on their own digital currencies – namely central bank digital currencies (CBDCs). Last year, a rule was introduced by government which obligated all exchanges and wallet providers to register with regulatory Financial Services and Markets Authority (FSMA).
Bitcoin Prices Dropped
Bitcoin (BTC) prices dropped to below $16,000 mark in November last year, down from almost $48,000 around this time last year. This at least temporarily halted rise of crypto- something which traditional financial establishment didn’t want to see happen.
Unsavory Practices by FTX
The report indirectly referred to unsavory practices by FTX exchange as well.
To conclude, Belgian Central Bank welcomed crash in cryptocurrency prices since it doesn’t have much impact on financial system stability while also introducing regulations regarding exchanges & wallets providers so as to ensure safety & stability in system going forward.