Pablo Hernández de Cos: Financial stability and crypto-assets

Speech by Mr Pablo Hernández de Cos, Governor of the Bank of Spain and Chair of the Basel Committee on Banking Supervision, at the "Observatorio de las Finanzas" Symposium, organised by El Español, Madrid, 21 February 2022.

The views expressed in this speech are those of the speaker and not the view of the BIS.

Good morning. Allow me to begin by thanking the organisers for inviting me to participate, once again, in the El Español newspaper's "Observatorio de las Finanzas". I would like to focus my address today on the topical and important issue of crypto-assets.

So-called "virtual currencies" have been with us now for more than a decade. However, a series of recent factors is raising the prospect of crypto-assets ultimately playing a significant role in the financial system. Looking beyond their potential benefits in terms of, for instance, efficiency gains in payment transactions or as catalysts for the development of new functionalities and value propositions for investors, I would like to underscore the risks that they could pose to financial stability, at least if they are not accompanied by effective regulation and supervision, as emphasised in the G20 communiqué of 18 February.

 I will begin my speech by describing the defining characteristics of the phenomenon and recent developments, before turning to the specific risks to financial stability that they may pose. I will end by highlighting some of the main elements shaping the current response of regulators and supervisors and the challenges that lie ahead.