Although there are advances, there are still skeptical positions towards Bitcoin in the Bank of Spain. KPMG suggests setting a regulatory and control framework for the use and trade of cryptocurrencies.
A report from the audit services firm KPMG in Spain deals with the status of that country regarding the regulation of Bitcoin and other cryptocurrencies. The document says that the Spanish-speaking country is ahead of the rest of the European nations.
Amid the expansion of cryptocurrencies, KPMG states that the vision of the Bank of Spain has changed since 2018. By then, they argued that the level of adoption of those assets was low, their volatility was high, and they were associated with criminal activities.
Regulations on cryptocurrencies have advanced so much in Spain that banks and exchanges that operate with them must register with the Central Bank. That proves that Spanish regulators have gradually adapted to the changes due to the massive adoption of Bitcoin.
However, the firm considers that there are still skeptical positions towards incorporating crypto assets in the financial world at the Bank of Spain.
Cryptocurrencies Are Here to Stay
According to KPMG’s analysis, people should not consider cryptocurrencies as something temporary. For that reason, they argue that the growing adoption of Bitcoin and other cryptocurrencies impacts the global financial sector. That has led them to consider setting a control and regulatory framework to guarantee adequate institutionalization.
Apart from the variations in the price of cryptocurrencies, the audit firm states that people’s interest in crypto assets has grown exponentially since 2021. Speculative expectations have caused much of that growth since the general public observes the emergence of a new class of assets.
Without even understanding it well, people begin to act in order not to miss a possible opportunity. However, the entry of institutional investors who understand its great potential has also contributed to that expansion.
Álvaro Casado, director of FS Consulting Strategy at KPMG in Spain, considers that cryptocurrencies are a new reality for the traditional financial system. He believes that the authorities should approach them by understanding its possibilities rather than by banning it.
The executive mentioned decentralized finance (DeFi), Play to Earn protocols, and non-fungible tokens (NFT). He said that they have limited use cases but the potential for development.
View of KPMG on Central Bank Digital Currencies (CBDC)
The report from KPMG also deals with CBDCs and the possible issuance of the digital euro by the European Central Bank (ECB). Casado believes that issuing that centralized digital asset could allow governments to operate in this new market.
The ECB recently appointed the members of the Market Advisory Group, who will advise the Eurosystem on the design and distribution of that asset.
Amid advances regarding cryptocurrencies, Casado added that society is facing a new paradigm to understand money. That has led him to think that financial actors will have to make an effort to adapt to that situation.
By Willmen Blanco