Crypto Markets Are ‘Bigger Than Subprime Mortgages Before The Financial Markets Crisis’ Cryptocurrency
Pablo Hernandez de Cos, Governor of the Bank of Spain, warned again about cryptocurrencies and the growth that the crypto market is experiencing. Hernandes de Cos said that although the market is still relatively small globally, the cryptocurrency market is now larger than subprime mortgages before the financial crisis around 2008, and its links to traditional finance do not stop growing.
Bank of Spain Governor Warns Against Crypto Expansion
The Governor of the Bank of Spain has warned of the risks of letting growing cryptocurrency markets mingle with traditional financial institutions. Closing an event, Pablo Hernandez de Cos explained that the interconnection between these unregulated markets and traditional institutions has increased due to the large number of trading instruments that have been launched during this last market phase. bullish, which includes ETFs, futures and investment funds. .
In this sense, Hernandez De Cos also stated that “some large private companies have publicly announced their interest in using crypto assets for cash management, while others have campaigned for it”. This prompted the Governor of the Bank of Spain to issue warnings about the instability that this inclusion of crypto variables could have in Spain.
Market growth and its dangers
The growth of the cryptocurrency market in Spain has been exponential, with some estimates giving it a size of over €60 billion ($64 billion) in crypto-related transactions. The Governor of the Bank of Spain also made reference to this, saying that they “must not ignore the fact that this market is already more important than that of subprime mortgages in the run-up to the global financial crisis”. .
Furthermore, Hernandez de Cos explained that the trading volume of some of the most important assets, such as bitcoin, ethereum and tether, are already close to the volumes traded by the New York Stock Exchange during certain sessions. This and the relative volatility of some crypto assets has led the Governor to believe that these markets need to be regulated soon.
Hernandez de Cos explained that:
At the Financial Stability Board (FSB), we recently pointed out that, if not properly regulated and supervised, these markets could quickly reach a tipping point.
This is not the first time that the Bank of Spain has warned of the risks associated with crypto in traditional markets. In a report published in April, the institution also explained how the correlation between crypto markets and traditional markets, and the rise of stablecoins could lead to several risks to economic stability.
What do you think of the new warnings from the Governor of the Bank of Spain regarding the growth of the crypto markets? Tell us in the comments section below.
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