“What’s happening in the cryptocurrency market, which consists of highly volatile and speculative virtual assets with no legal backing or guarantees, and many of which are used in Ponzi schemes, is that this year they have lost more than half their value, and experts predict they will continue to fall,” contrary to what is happening in the regulated market.” Héctor Valdez Albizu.
SANTO DOMINGO.- To further analyze the monetary impact and functionality of the schemes for using and marketing digital currencies, which are not regulated in the country, the Central Bank of the Dominican Republic (BCRD) is working together with other central banks, declared Héctor Valdez Albizu, governor of the regulatory entity, yesterday.
During his presentation at the XXII Latin American Congress of Financial Technology and Innovation (CLAB) 2022, he explained that for the country to have cryptocurrencies, a regulatory process must first be completed, so that the production and issuance of the coins are carried out by digital means regulated by the Dominican financial system.
“Before moving on to the second topic of these remarks, I cannot fail to mention in this forum the digital currencies that central banks could issue, which would be obligations of the same, originated and transferred by digital means, and which would have the backing of the issuing entities,” said Valdez Albizu.
He noted that, like other central banks, “we are completing an analysis phase and exploring the nature, monetary impact and functionality of these schemes; relying on the advice of the International Monetary Fund and the support of the Center for Latin American Monetary Studies, along with a group of central banks.”.
Valdez Albizu gave the lecture “Regulatory trends in digital banking, information security, cybersecurity and financial innovation (Innovation Hub)”, at the event organized by the Latin American Federation of Banks (Felaban).
After explaining the phase the monetary entity is in regarding the adoption of digital assets, he detailed the reasons why the traditional banking system has been able to advance in digitalization with lower risks and more guarantees.
In that order, he cited the 2022 annual economic report of the Bank for International Settlements, which indicates that the monetary and financial system of the future should combine digital features with trust in central banks, a position shared by the governor of the BCRD.
Valdez Albizu read some of the study's conclusions: “There is an explosion of creative innovation in money and payments, opening up prospects for a future digital monetary system that continually adapts to serve the public interest. A system based on central bank money offers a more solid foundation for innovation, ensuring that services are stable and interoperable.”.
It warns the sector
The governor of the monetary entity was receptive to continuing to analyze all the variables that make up the digital asset market, which already has a presence in the country with ATM services that allow buying and selling virtual currencies, without regulation from the highest financial authority.
"What is happening in the cryptocurrency market, which are highly volatile and speculative virtual assets, without legal backing or guarantees, and many of them used in Ponzi schemes, is that this year they have lost more than half of their value and experts predict that they will continue to fall," contrary to what is happening in the regulated market, he considered.
Regarding currency volatility, the Central Bank warned the public in 2017 and again in 2021 and 2022, stating that trading these assets is risky from different perspectives.
“Anyone who acquires this type of virtual asset, whether as an investment or with the intention of using it as a means of payment, as well as anyone who accepts them as a form of payment in commercial transactions, will do so at their own risk,” warned the Central Bank governor.
