Tensions Rise as Global Financial Body Pushes for Tighter Crypto Oversight

A new report by the Bank for International Settlements has reignited the clash between traditional financial authorities and the crypto world.

Framed as a call to limit the potential risks of digital assets infiltrating conventional markets, the BIS paper has not gone down well with Web3 advocates.

Rather than proposing a ban, the BIS suggests a regulatory firewall between crypto and traditional finance, fearing spillover effects as DeFi platforms increasingly mimic the functions of banks and asset managers.

The report points to risks hidden beneath crypto’s transparent surfaces—such as scams, user confusion, and anonymity-driven recklessness—as reasons for stricter oversight. It even questions whether the open nature of blockchain actually improves clarity for users.

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These suggestions have triggered fierce pushback. Critics argue that the BIS misunderstands how DeFi works. CoinFund’s Christopher Perkins slammed the recommendations as not only out of touch but harmful, warning that such restrictions could amplify the very instability regulators aim to avoid.

He emphasized that open-source code is inherently more transparent than the traditional financial machinery BIS seeks to protect.

Others, like Curve’s founder Michael Egorov, offered less nuance—flatly rejecting the BIS stance with a call to boycott.

As DeFi weaves deeper into the fabric of global finance, the gap between institutional oversight and crypto-native values appears wider than ever. What one side views as risk, the other sees as progress. And for now, there’s little sign of either backing down.

Alexander Stefanov