The Governor of the Belgian Central Bank has stated that his institution rejoiced over the precipitous drop in cryptocurrency prices that occurred in 2022. He also stated that the beginning of crypto winter in 2018 was “excellent news for us.”
According to Business AM, Governor Pierre Wunsch referred to the “implosions” in the cryptocurrency market that occurred in 2018 as “excellent news in themselves for us.”
The news organization made an effort to clarify that in this context, “us” refers to “the regulators of the viability of the conventional financial system.” This clarification was made clear in a statement that was published.
Wunsch said that the bank was “worried about the growing importance of cryptocurrency investments because of how they could affect the stability of the financial system.” Wunsch expressed concern about this.
However, he claimed that:
“In the end, the collapses took place without having any kind of effect on the financial stability.” Therefore, the issue was resolved on its own.”
The bank praised the fact that there were “few” in the way of “contagion from the cryptocurrency market” to “the equity markets” in its assessment of the financial year 2022.
The bank’s letter read:
“Because there are few inter-connections between regulated financial institutions and the world of cryptocurrency, the effect of [cryptocurrency market] turbulence on the traditional financial system remained low,” as quoted in “As there are few inter-connections between regulated financial institutions and the world of crypto,”
The news organization provided an explanation stating that “the turmoil” that occurred in 2022 “at least momentarily stopped the rise of crypto.”
” According to what was written in Business AM, this was “something the financial establishment did not want to see happen.”
Wunsch continued by saying that cryptocurrencies possessed “significant parallels” to previous eras of inflated financial markets. In addition to this, he stated that “the assessment” of cryptocurrencies is “highly speculative.”
The news organization further stated that the report “indirectly referenced” the “unsavory practices” of the cryptocurrency exchange known as FTX.
Belgian Central Bank: Why Did it Welcome Crypto Crash?
According to an article published by Business AM, central banks “are not a neutral entity when it comes to cryptocurrencies.” The explanation provided by the media source was that this was according to the fact that “they are working on their own digital currencies—specifically, central bank digital currencies (CBDCs).”
After reaching an all-time peak of almost $48,000 around this time last year, the price of a single Bitcoin (BTC) fell below the $16,000 threshold in November of the previous year.
A regulation that requires all cryptocurrency exchanges and wallet providers to sign up with the regulatory Financial Services and Markets Authority was implemented by the government just a year ago (FSMA).
08 Mar 2023
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