Governor of Bank of Spain: Crypto Markets Are ‘Bigger Than Subprime Mortgages Before the Financial Market Crisis’

Pablo Hernandez de Cos, governor of the Bank of Spain, has again warned about cryptocurrencies and the growth that the crypto market is experiencing. Hernandes de Cos stated that, while the market is still relatively small at a worldwide level, the cryptocurrency market is now bigger than subprime mortgages before the financial crisis circa 2008, and its links with traditional finance keep growing.

Governor of Bank of Spain Warns About Expansion of Crypto

The governor of the Bank of Spain has warned about the risks of letting the growing cryptocurrency markets mix with traditional financial institutions. While 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 bull market phase, which includes ETFs, futures, and investment funds.

In this sense, Hernandez De Cos also stated that “some large private companies publicly announced their interest in using crypto assets for cash management, while others campaigned for it.” This has pushed the governor of the Bank of Spain to raise warnings about the instability that this inclusion of crypto variables might have in Spain.

Growth of the Market and Its Dangers

The growth of the cryptocurrency market in Spain has been exponential, with some estimations giving it a size of more than 60 billion euros ($64 milliard) in crypto-related transactions. The governor of the Bank of Spain also made reference to this, stating that they “must not overlook the fact that this market is already larger than that for subprime mortgages in the run-up to the global financial crisis.”

en outre, Hernandez de Cos explained that the trading volume of some of the most important assets, like bitcoin, ethereum, and tether, are already near the volumes traded by the New York Stock Exchange during some sessions. This and the relative volatility of some crypto assets have pushed the governor to believe that these markets need to be regulated soon.

Hernandez de Cos explained that:

We at the Financial Stability Board (FSB) have recently underlined that, if not properly regulated and supervised, these markets could quickly reach a tipping point.

This is not the first time the Bank of Spain has warned about the risks associated with crypto in traditional markets. In a report issued in April, the institution also reported on how the correlation between crypto and traditional markets, and the rise of stablecoins might bring several risks to economic stability.

Tags dans cette histoire

What do you think about the new warnings of the governor of the bank of Spain regarding the growth of crypto markets? Dites-nous dans la section commentaires ci-dessous.

Sergio Goschenko

Sergio is a cryptocurrency journalist based in Venezuela. He describes himself as late to the game, entering the cryptosphere when the price rise happened during December 2017. Having a computer engineering background, living in Venezuela, and being impacted by the cryptocurrency boom at a social level, he offers a different point of view about crypto success and how it helps the unbanked and underserved.

Crédits image: Shutterstock, Pixabay, Wiki Commons

Avertissement: Cet article est à titre informatif seulement. Il ne s'agit pas d'une offre directe ou d'une sollicitation d'offre d'achat ou de vente, ou une recommandation ou une approbation de tout produit, prestations de service, ou des entreprises. Bitcoin-Tidings.com ne fournit pas d'investissement, impôt, légal, ou conseil comptable. Ni la société ni l'auteur ne sont responsables, directement ou indirectement, pour tout dommage ou perte causé ou prétendument causé par ou en relation avec l'utilisation ou la confiance accordée à tout contenu, biens ou services mentionnés dans cet article.

Lire avertissement