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The Biden administration has asked Congress to pass new legislation to clarify how cryptocurrencies should be regulated.
The U.S. Financial Stability Oversight Council, the country’s top group of financial regulators, including the Treasury Department, issued a report on Monday to reach agreement on various areas, including how to regulate bitcoin and other crypto assets. urged politicians to spot market.
The report comes as members of Congress debate new proposals covering everything from the $140 billion stablecoin industry to tax rules for cryptocurrency brokers. But Biden administration officials worry the same thing will happen again. collapse For the now infamous stablecoin TerraUSD, those close to congressional talks say it is still months away from passing a new bill.
The FSOC report also sees the crypto industry reeling from a historic collapse in prices, with several high-profile companies going bankrupt, and raises questions about who should be the primary overseers of the volatile crypto markets. ing.
Regulatory bodies such as the Securities and Exchange Commission and the Commodity Futures Trading Commission continue to seek jurisdiction over the industry. SEC Chairman Gary Gensler said most cryptocurrencies (and the platforms on which they are traded) are Regulated Because many of the tokens qualify as securities under U.S. law.
Treasury officials said the report’s authors, including Gensler and CFTC Chairman Rostin Behnham, did not intend to endorse one agency over another.
The report warns that many cryptocurrency activities lack basic risk management to protect against run risk or to prevent excessive leverage, adding that cryptocurrency prices , seems to be driven primarily by speculation rather than being based on the current underlying economic use case, with prices repeatedly registering significant and widespread declines.”
The FSOC report also suggests cooperation among institutions to close existing loopholes that allow cryptocurrency businesses to find the most favorable regulations for their businesses.
Some crypto businesses have affiliates and subsidiaries that operate under different regulatory frameworks, and no single regulator may be aware of the risks across the business.
To that end, the FSOC has recommended a legislative passage that gives federal market regulators the power to make rules for cryptocurrency markets not covered by existing U.S. securities laws.
Rules should cover conflicts of interest, unfair trade practices, segregation of customer assets, cybersecurity and record keeping.
The councils report also calls on Congress to pass legislation that would give regulators visibility into subsidiaries of cryptocurrency platforms and create a federal framework for stablecoin issuers.
A group of regulators added that while traditional finance’s exposure to crypto activity is limited, this could “increase rapidly.” is cited as an example of potential interconnectivity between traditional finance and cryptocurrencies. This summer, the virtual currency exchange Coinbase forge The deal with wealth management giant BlackRock will give BlackRock customers easy access to cryptocurrencies.
