The International Regulations Bank (BRI) has just launched an unprecedented warning: cryptos and decentralized finance (DEFI) would have crossed a critical threshold, threatening global financial stability. Behind this observation hides a paradox. While the crypto ecosystem prides itself on democratizing finance, it could, according to the BRI, amplify inequalities and create unsuspected systemic risks. Between massive adoption, gearbox regulation and contagion effects, decryption of an alert that shakes the markets.
In short
- The BRI alerts: the cryptos would have crossed a critical threshold, threatening global financial stability.
- The massive entry of finance giants increases the risks of contagion between crypto and traditional markets.
- The DEFI, supposed to democratize finance, could, on the contrary, to dig inequalities.
- BRI calls for urgent regulation to avoid a global systemic crisis.
The critical mass of cryptos: an underestimated turning point
Long perceived as a speculative niche, cryptos have now reached a critical size. BRI stresses that Bitcoin ETF, Stablecoins and REVAL ACTIVE tokenization (RWA) have transformed the ecosystem. These innovations, designed to bring Crypto and Traditional Finance closer (Tradfi), paradoxically increased the risks of contagion.
First alarm signal: the shattering entry of asset management giants in the sector. Blackrock, Fidelity and other institutional actors converted Bitcoin into “legitimate” financial product, attracting unprecedented capital. Result ? An increased correlation between cryptos prices and stock market indices, erasing the myth of a disconnected market.
Then, the tokenization of RWAs – real estate, bonds, precious metals – promises to melt traditional and digital active in the same crucible. If this hybridization stimulates innovation, it also creates risky bridges. Imagine a tokenized real estate crash propagating via the protocols DEFI: the consequences would be unpredictable.
Finally, the stablecoins, these cryptos backed by classic currencies, now play a central role. TETHER and USDC serve as bridges between tradfi and defi. But their opacity and sometimes doubtful reserves make them delaying bombs. The BRI insists: a stablecoins crisis could paralyze global payment systems.
Reverse redistribution: when crypto digs inequalities
One of the most disturbing graphics in the report reveals a perverse mechanism. In times of crisis, small portfolios increase their exposure to cryptos, while experienced investors reduce theirs. Translation: the least wealthy buy the decline, hoping for a rebound, while the initiates make their earnings.
Ulrich Bindseil, of the ECB, had already underlined this phenomenon. According to him, Bitcoin works like a wealth pump, transferring the capital of newcomers to the first investors, often already wealthy.
The extreme volatility of the market amplifies this bias. The neophytes, attracted by rapid gains promises, become the victims of a rigged game.
Worse, the DEFI, presented as an egalitarian alternative, reproduces the flaws of classical finance. Over -ollateralized loans, usurer levels and “rugs sweater” (scams where developers flee with funds) especially penalize the uninitiated. The BRI denounces an illusion of democratization: behind libertarian discourse, would hide an increased concentration of capital.
Ultimate irony: the regulators, by slow to supervise the sector, left these imbalances thrive. Without safeguards, the crypto becomes a global casino where the rules insidiously favor the most powerful.
Financial innovation in front of banks: the shock of models?
BRI report Sketch a nightmare scenario: a toxic fusion between Defi and Tradfi. Intelligent contracts, used outside any regulatory framework, would infiltrate traditional markets. DEX (decentralized exchange platforms) would become systemic cogs, without supervision.
Faced with this threat, the authors advocate a “confinement” strategy. Inspired by Basel agreements, it aims to isolate crypto risks while allowing innovation. For example, banks wishing tokenize assets should avoid blockchains without authorization, deemed too risky.
Another priority: regulate the DEFI such as tradfi. Customer knowledge, transparency of protocols, qualifications of developers … The BRI proposes to impose standards similar to those of classical finance. A bold idea, but complex to implement. How to regulate decentralized entities such as DAOs (autonomous organizations)?
Finally, the stablecoins are in the crosshairs. Their central role in the DEFI makes it potential failures. A loss of confidence in Tether could trigger a cascade panic, even affecting traditional markets. The BRI pleads for compulsory reserves and strict audits – an approach already adopted by the EU with Mica.
BRI warning is not a plea against innovation, but a call to lucidity. Cryptos, now essential, require a subtle balance: encourage their disruptive potential while neutralizing their risks. Without agile regulation, the critical mass affected could trigger a chain reaction with incalculable consequences. The ball is in the camp of the States-and not only of the United States, which want to erase their debt thanks to Bitcoin.
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