Countries that are slow to build up regulations for crypto assets could create arbitrage risks that players operating globally could exploit, the head of France’s central bank said on Tuesday.
The European Union has sought to be a global standard-setter, proposing in July that companies get a licence and provide customer safeguards to issue and sell digital tokens in the 27-nation bloc.
But crypto assets, such as cryptocurrencies like bitcoin, are largely still unregulated globally.
French central bank governor Francois Villeroy de Galhau said he hoped the EU regulations would be formally adopted by March of next year, adding that other unnamed “major jurisdictions” were less advanced.
“We should be extremely mindful to avoid adopting diverging or contradictory regulations, or regulating too late,” Villeroy told a conference on digital finance in Paris.
“To do so would be to create an uneven playing field, risking arbitrage and cherry picking,” he said, adding that “unduly complex” regulations could fall short of protecting clients and preventing money-laundering.
The EU has pressed ahead with new crypto-asset regulations, while the United States is still in the process of identifying gaps in its rules.