The remarks follow a recommendation by a special Basel banking committee that banks adopt systems for maintaining stablecoins and cryptocurrencies.
In a March 17 tweet, Johan Van Overtveldt, a former Belgium finance minister and current member of the European Parliament, called for a complete ban on cryptocurrencies in light of the recent crisis in the banking industry.
“There is still another lesson to be gained from the recent financial turmoil. Implement a strict ban on cryptocurrencies, tweeted Van Overtveldt, adding that cryptocurrencies have “no economic or social value.”
“If a government prohibits drugs, it should also prohibit cryptocurrencies,” he suggested, pointing to new anxieties coming from the crisis at Silvergate and Silicon Valley Bank, which has subsequently expanded to European markets, driving shares of banks such as Credit Suisse to record lows.
The remarks follow a recommendation by a special Basel banking committee that institutions create mechanisms for retaining and maintaining Bitcoin and stablecoins by 2025.
According to Van Overtveldt, who is leading parliament’s efforts to pass a law permitting the trading of securities on distributed ledger technology, the technology has “enormous potential” to increase productivity. Still, he warns that many speculative projects that enter finance through cryptocurrencies tend to harm consumers.
The upcoming banking law in the European Union will contain some strict capital requirements for institutions that hold cryptocurrencies.
The Basel Committee, composed of banking regulators from critical financial centers worldwide, has set January 2025 as the deadline for establishing capital criteria for institutions that hold cryptocurrencies such as Bitcoin and stablecoins.
“For the time being, banks have relatively minimal crypto-asset exposures and limited engagement in crypto-asset-related service provision. Banks have showed interest in trading crypto-assets on their customers’ behalf and providing services linked to crypto-assets. From a global viewpoint, it would also enable the EU to meet the Basel timetable for implementation.”
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