The Portuguese Blockchain and Cryptocurrency Association has defended that the regulation of crypto-assets is important, but cannot castrate evolution, while the Bank of Portugal considered that assets such as Bitcoin do not yet fulfil the functions of currencies.
“I am an advocate of regulation as long as it does not castrate technological evolution, but fulfils the role of protecting investors and indicating the benefits and harms of technology”, said Fred Antunes at the online conference “Cryptocurrencies: A solution to what problem? ”, organised by the Portuguese Association of Digital Law (APDIG).
According to Fred Antunes, the cryptocurrency market “was born from a somewhat libertarian essence” and the “only thing it intends to do is bring transparency and justice to financial systems and digital management systems”.
“What can never happen are the scandals of the past, where some have many privileges and others do not even have the right to choose whether or not to participate in the payment of privileges for some,” he said.
On the side of Banco de Portugal, the director of the Payment Systems Department, Rita Bairros, considered that digital currencies are not currency because they do not fulfil the functions assigned to currencies: given the instability, they do not allow for the preservation of purchasing power, therefore, they do not allow store of value; are not legal tender (even if in some places they function as a means of payment); and the value fluctuates a lot over time, so they don’t work as a unit of account. “Without a central entity, it is difficult for cryptocurrencies to be considered true currencies,” she said.
From a legal perspective, the chairman of the Bar Association said that cryptocurrencies do not comply with the principle of legal tender (when they are mandatorily accepted as a means of payment) and the principle of monetary nominalism (even if they lose value, payments are made in the same amount) . Still on the topic of crypto assets, Menezes Leitão said that there are areas not covered by the law, but that will become so: “It is normal in a new phenomenon that the law takes time to intervene, but sooner or later it regulates”, he said.
For Fred Antunes, Bitcoin “does not even have to be currency”, it is rather a “digital, intangible asset, which in no way resembles the currency we are used to carrying in our pocket”. He further considered that Bitcoin’s volatility “is a myth”, stating that Bitcoin’s evolution in 12 years has been one of growth and that volatility depends on which currencies it is compared to.
In Europe, he said, where the weight of inflation has not been felt (which is now beginning to be felt), the perception of Bitcoin volatility is of a different dimension for those who live in Turkey or Brazil, where their currencies are devaluing.
“Bitcoin will be a safe haven asset” for the citizens of these countries, he predicted, adding that he believes that in the medium term Bitcoin will be “recognised as legal tender by large economies, in the case of Brazil and Turkey” because “from the moment when in a situation of inflation, the population needs an asset to ‘hedge’ [risk coverage] against the government’s poor performance”.