The drums keep pounding louder in regards to the need to regulate cryptocurrencies – perhaps, more importantly, stablecoins which act as a proxy for fiat currency.
As was reported earlier, Fed Vice Chair Michael Barr echoed the above sentiment. Today, Fed Chair Jerome Powell is stating the same at a presentation for the CATO Institute, a right-leaning group.
This morning, WaPo is out with an article saying the US Department of Treasury will post a statement that crypto may pose a significant financial risk that outweighs the benefits – minus regulation. In effect, a call to arms for Congress to act – something the legislative branch has been slow to do.
Citing several individuals on background, the report concludes that while there is no systemic risk yet the “situation could change rapidly.”
To quote the article:
“Treasury is trying to create the analytical basis for very strong oversight of this sector of finance. They’re also hoping that with this kind of report, it becomes hard to have regulations that back off of tough oversight of the industry. This framework would serve as a benchmark, to say ‘Let’s be focused on these risks and not be carried away with the technology and industry promises.’ ”
The report noted that Americans for Financial Reform, a left-wing group, see crypto as a “predatory model.”
Currently, there are several bills circulating on Capitol Hill but it is unclear how soon any legislation will come to the floor for a vote. The House Committee on Financial Services said earlier this month they will hold a markup session on stablecoins.
Meanwhile, industry insiders are working the halls of Congress to make certain that any new regulations are not so draconian as to kill the industry, emphasizing the benefit of innovation in financial services while providing more access to the underbanked.