Crypto Industry Blasts BIS Report on Digital Asset Separation

The Bank for International Settlements (BIS) has come under fire from the crypto industry following the release of its latest report, which advocates for stricter separation between digital assets and traditional finance. Christopher Perkins, president of blockchain investment firm CoinFund, has labeled the BIS’s recommendations as “dangerous” and “uninformed,” warning that they could backfire on the global financial system.

In an April 19 post, Perkins responded to the BIS’s April 15 report titled “Cryptocurrencies and Decentralized Finance: Functions and Financial Stability Implications.” He criticized the report’s call for a “containment” approach to cryptocurrencies, arguing that it reflects fear and a fundamental misunderstanding of the technology. “Crypto is not communism,” Perkins wrote. “It’s the new internet that provides anyone with a connection access to financial services. You cannot control it any more than you control the internet.”

Perkins warned that isolating the crypto ecosystem could introduce major liquidity risks to the broader financial system, particularly since crypto markets operate 24/7 while traditional financial systems are constrained by trading hours. “If implemented, [these policies] will cause — not mitigate — the systemic risk they seek to prevent,” he said.

The BIS report expressed concerns about the rapid growth of crypto and DeFi markets, warning that the influx of capital and users could destabilize traditional markets and increase investor risk. Perkins countered that DeFi actually offers improvements over traditional finance, including greater transparency and reduced reliance on centralized intermediaries. Addressing the BIS’s discomfort with anonymous DeFi development, Perkins argued that many traditional finance institutions don’t publish their developer lists either. “Sure, public companies provide a degree of disclosure and transparency, but they seem to be dying off in favor of private markets,” he said.

He also took issue with the BIS’s warnings about stablecoins potentially undermining monetary policy in certain countries. “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,” Perkins noted.

Perkins wasn’t alone in his criticism. Christian Catalini, co-founder of Lightspark, described the BIS’s stance as outdated, comparing it to “writing parking regulations for a fleet of self-driving drones — earnest work, two technological leaps behind.”