CoinFund President Slams BIS Report on Cryptocurrency

Christopher Perkins, the president of CoinFund, has strongly criticized the Bank for International Settlements’ (BIS) recent paper on cryptocurrency. The report, titled “Cryptocurrencies and decentralized finance: functions and financial stability implications,” acknowledges the growing significance of cryptocurrency with the rise of ETFs, stablecoins, and tokenized assets. However, Perkins described the recommendations in the report as “completely uninformed and frankly, dangerous.”

Perkins argued that cryptocurrency is not akin to communism but rather the new internet that provides universal access to financial services. He rejected the comparison to Cold War containment strategies, stating that cryptocurrency, like the internet, cannot be controlled. Perkins warned that artificially separating traditional finance from cryptocurrency markets could create liquidity risks. He argued that forcing a division between the 24/7 settlement capability of crypto markets and the time-restricted traditional system would “lead to the next systemic crisis.”

Instead of containment, Perkins advocates for modernizing traditional financial systems to integrate with blockchain technology. He suggested that regulation should focus on updating legacy systems rather than isolating new technology. “Capital rules should not ‘contain’ public blockchains—they should encourage them!” he argued. Perkins also challenged several other conclusions in the BIS report, particularly focusing on its concerns about information asymmetries in decentralized finance (DeFi). He questioned the BIS’s criticism regarding anonymous developers in DeFi projects, noting that traditional financial institutions typically do not publish lists of their developers.

Perkins also took issue with the BIS’s worry that stablecoins would cause macroeconomic instability in nations. “If there is demand for USD stablecoins and it helps improve the condition of anyone in the developing world, perhaps that is a good thing?!” he wrote. He also added that people worldwide deserve access to basic financial services regardless of their country’s monetary stability. Perkins’ criticisms highlight the ongoing debate between traditional financial institutions and the emerging cryptocurrency sector, with each side advocating for different regulatory approaches.