Okay, okay, I get it. The Bank for International Settlements (BIS) has been wringing its hands about crypto. Another report, another doomsday prediction. They're saying crypto and DeFi are getting too big for their britches, that they're a threat to financial stability. Yawn. Wake me up when they get to the point of saying anything different. So really, it’s like watching your grandpa attempt to play Fortnite. All due respect to those servants of the public, bless their hearts, but they just don’t get it.
BIS Scared? More Like Opportunity!
Let's be real. The BIS is an institution very much founded on traditional finance principles. They’re the gatekeepers of a system filled with inefficiencies, high fees, and plenty of gatekeeping. After all, they’re not going to want some new digital currency undermining the dollar. It’s a dream, an innovator, a changemaker, the new normal for most. They are seeing their influences fading.
The BIS report should sound alarm bells over the growing interconnectedness between crypto and traditional finance. This trend is accelerated by innovations such as spot Bitcoin ETFs and tokenization of real world assets (RWAs). They are concerned those lines are blurring. I say, bring on the blur! Making crypto work within the current system isn’t a bug, it’s a feature. It’s the equivalent of putting nitro in a crapped out old engine. It’s high time TradFi was treated to a long overdue facelift.
They worry that stupid retail investors are buying the dip while smart institutions are selling into it. They portray it as the rich attacking the middle class, worsening wealth inequality. To be clear, there is a danger of that. Let's flip the script here. Crypto offers anyone, regardless of their background, a chance to participate in a financial system that's traditionally been rigged in favor of the elite. This isn’t a get rich quick scheme, but rather an effort to democratize access to wealth-building opportunities. Some will succeed, some will fail, but the opportunity to try is what counts. That’s a vast improvement over what we have now.
Contain and Regulate? Nah, Innovate!
The BIS wants to "contain and regulate" DeFi, slapping TradFi compliance measures like KYC, transparency obligations, and licensing on everything. Sounds like fun, right? Wrong. That’s akin to attempting to strap a leash onto a cheetah. After all, DeFi is supposed to be the poster child of decentralization, permissionless innovation, and liberating us from the chains of centralized overlords. Over-regulating it will strangle this potential at birth, pushing innovation further underground.
Rather than seeking to strangle DeFi in its cradle with regulatory shackles, we ought to be promoting the kind of responsible innovation we want to see. Create user education campaigns that raise awareness of the risks and promote best practices while focusing on self-regulation and peer pressure within the community. We certainly don’t need the BIS to babysit us. We're adults (mostly).
The report sounds the alarm over both stablecoins and “cryptoisation” in developing countries. Yes, stablecoins are risky without a regulatory framework. As such, they are a very important on-ramp to the crypto ecosystem. Further still, they offer aid workers a secure medium of exchange in nations where hyperinflation or currency collapse makes traditional money worthless. Cryptoisation, while presenting risks, offers financial inclusion and empowers individuals in countries where traditional financial systems are failing them.
Level Up Your Game, Escape the Matrix
The UK's proposal to regulate protocol operators? Far from it—it’s a cynical and desperate move to try to control the big picture narrative and prop up the status quo. With decentralization, accountability is spread out wide—not just held by a small group of powerful people.
Look, I get it. Change is scary. Because it’s always harder to change, especially when it’s changing from something that you know— even if what you know is utterly broken. But crypto isn't going away. It’s not a fad, it’s not a bubble and it’s not a threat. It’s an opportunity to radically improve the financial system, to build a world that is more inclusive, more transparent, and more efficient.
The BIS can continue churning out its own Basel-style reports and scaremongering about the perils of crypto. While they’re out playing checkers though, we’re here side hustling on that 4D chess.
So, to all my “noobs” out there who are interested in exploring the world of crypto, don’t allow the fear-mongering to deter you from doing so. Educate yourself, know what you’re getting into, and take the plunge. The future of finance is being created today, and you do not want to miss out.
Forget the BIS. Embrace the chaos. Embrace the innovation. Embrace the future.
It's time to level up.
