BIS Crypto Containment Strategy has become a major cause for controversy. As critics of industry leaders point out, it is flawed and dangerous to innovation in the financial services industry.

A report was released by the Bank for International Settlements (BIS) on April 15. In short, it called for crypto markets to be kept separate from traditional finance and swiftly drew the wrath of many.

Key-Takeaways:

• The BIS Crypto Containment Strategy, as per critics, is controversial, as opponents like Christopher Perkins from CoinFund say it stifles innovation and exposes traditional finance to risk.
• Critics argue the strategy misunderstands DeFi and stablecoins, and it affronts crypto’s potential benefits or, at least, misrepresents the technology.

CoinFund President Condemns BIS Approach

The BIS Crypto Containment Strategy is strongly opposed by Christopher Perkins, president at CoinFund. He called the rules ‘uninformed and dangerous’ on April 19.

The @BIS_org just published a new paper, “Cryptocurrencies and decentralised finance: functions and financial stability implication.” The good news is that the authors finally realize that advancements in crypto (including the growth of ETFs, stablecoins and tokenized real world…

— Christopher Perkins 🦅🌎⚓️NYC (@perkinscr97) April 19, 2025

Dropping the BIS stance that Perkins attributes to “fear, arrogance, and ignorance” about cryptocurrency was praised by him. Cryptos aren‘t communist — actually, crypto is the ‘new internet’—it‘s’ a way to give everyone financial access, he reasons.

The heavy rebuke reflects a battle between traditional finance and decentralized finance. Perkins, however, warned that with traditional systems, the BIS strategy could leave them open to massive liquidity risks.

The comparison between crypto markets, which are 24/7 markets, and traditional markets with set trading hours was pointed out by him. These risks, Perkins argued, could very well “cause, not mitigate, the systemic risk” the BIS is attempting to suppress.

Challenging Core Assumptions About DeFi

The BIS report states that DeFi is a regulatory problem that the Crypto Containment Strategy legitimizes. But it is believed that its most important improvements for DeFi compared to traditional finance are the reducing of opacity and fixing of structural issues within something like finance.

According to BIS, it is particularly concerned that DeFi developers operate in anonymity. This, said Perkins, is a challenge to the statement that traditional financial companies rarely even divulge the developers.

The point of this divide is that there are disagreements regarding transparency and how regulation is approached. Clearly, these two sides of the coin see the issues in a traditional financial body and a cryptocurrency builder differently.

The BIS had warned investor protection is a concern as crypto markets launched. Crypto has “critical mass,” so to speak, they say and, as such, better regulation is needed.

But blockchain proponents say that DeFi’s architecture gives it natural transparency and security. According to them, such features are not present in traditional finance systems.

Stablecoin Benefits Versus Perceived Risks 

The crypto containment strategy by the BIS includes targeting stable coins which, as it warns, could result in “macroeconomic instability in developing economies.” Specifically, they mention countries such as Venezuela and Zimbabwe.

This view disagrees with Perkins who believes USD stablecoins would actually help us in developing nations. In his argument, he argues that these stablecoins serve as financial tools and stability that isn’t available.

The crypto containment strategy by the BIS includes targeting stable coins which, as it warns, could result in “macroeconomic instability in developing economies.” Specifically, they mention countries such as Venezuela and Zimbabwe.

This view disagrees with Perkins who believes USD stablecoins would actually help us in developing nations. In his argument, he argues that these stablecoins serve as financial tools and stability that isn’t available.

While the BIS Crypto Containment Strategy has faced criticism, other industry leaders have come out against it and Lightspark co-founder Christian Catalini doubted that the BIS approach was anything more than ‘writing parking regulations for a fleet of self-driving drones.’

Catalini further asserted that the BIS framework is ‘two technological leaps behind’. He argues the technology it wants to regulate fundamentally misunderstands how it works.

The BIS Crypto Containment Strategy may be seriously hampered by its implementation ability, on account of this growing coalition of critics. According to opponents, to combat the rapid growth of blockchain technologies, people will need to understand them and not rely on traditional financial models based on isolation.

Conclusion 

The tension between traditional finance and cryptocurrency is displayed in the BIS Crypto Containment Strategy. Isolation is also advised against by leaders who say enough risk vs. innovation balance is already achieved in evolving tech. Before risk and innovation can be balanced, regulatory approaches must leave behind containment.