FED Vice Chairman's view on the cryptocurrency industry
While cryptocurrencies carry many of the risks that the traditional financial industry often faces, they still need a new regulatory framework – two Fed Vice Presidents conveyed in their latest speech.
Two US government officials, Michael Barr and Lael Brainard, spoke at the Clearing House and Bank Policy Institute 2022 annual conference yesterday. But both Vice Chairs of the Federal Reserve (Fed) expressed concern about the cryptocurrency industry.
Michael Barr – former Ripple Labs advisory board member appointed to lead the Fed on July 13 – cited historical examples of destabilizing the economy and called for regulatory action. stablecoins:
“I believe Congress should quickly pass legislation to bring stablecoins, especially those that serve as a means of payment, into the realm of strict regulation.” Meanwhile, Ms. Lael Brainard said that the cryptocurrency market has risks similar to that of the traditional financial sector, but will need a new set of regulations for situations not covered by existing laws. .
“We see that the crypto financial system has all the familiar risks from traditional finance,” she said at the conference. But given the peculiarities of crypto, there is a need to create a clear regulatory corridor quickly.
Immediately after taking office as Vice Chairman of the Fed, Brainard is running and promoting the national digital currency (CBDC) and coordinating with the central bank to observe every move of the crypto industry. Since then, Ms. Lael's stance on the industry has become paramount.
In July, she publicly urged to accelerate the crypto regulatory framework before things go too far, “adjust now or regret later” – she issued an appeal. Attached to the statement is a list of failures experienced by the digital asset sector.
She argued that the shortcomings of the cryptocurrency industry are essentially the same as those of the traditional financial sector, so the same safety standards need to be met before crypto becomes too big and becomes too big. threat to the financial system.
Fed Vice Chairman emphasized:
“Stablecoins are one of the areas that I think are most likely to be at risk if not managed properly and of course those risks can be easily infect the core financial system because of their nature.”
The historic crash of TerraUSD prompted the Fed and other agencies to step in, and stablecoins have been at the heart of crypto legislation in Congress throughout the past year. The leadership of the House Financial Services Committee has introduced a bill on stablecoins before the August break.
Collectively, Ms. Lael Brainard asserts that all of the above strengthens the position of CBDCs. in the future financial stability, but she herself announced that the process of perfecting the national digital currency could take up to 5 years.
Crypto Fox News summary
Sep 08, 2022