The chairman of the US Federal Reserve System (FRS), Jerome Powell, believes that the rapid development of the crypto industry requires the rapid creation of rules and recommendations for regulating digital assets.
During a panel session hosted by the Bank for International Settlements (BIS), Jerome Powell stated that new forms of digital money such as cryptocurrencies and stablecoins pose risks to the US financial system and require new rules to protect consumers.
Powell acknowledged that new technologies are likely to make electronic payments cheaper and faster. But they can also destabilize existing financial institutions.
“Our existing regulatory frameworks were not created with the digital world in mind,” he noted. “Stablecoins, central bank digital currencies, and digital finance in general will require changes to existing laws and regulations, or even entirely new rules and frameworks.”
The Fed chief did not say exactly what rules might be required, but said they should follow the “same activity, same regulation” principle, which means that transactions outside the traditional banking system should be regulated in the same way as when they are executed by banks.
In his speech, the Fed chairman outlined several risks associated with the growth of digital finance, including for consumers and the financial system as a whole.
“Americans who buy stablecoins or cryptocurrencies may not fully understand the extent of their potential losses, or that these investments typically lack the government protection that comes with many of the traditional financial instruments and services they are used to,” he said. is he.
It is likely that the interaction of the crypto industry and regulators will create legislation that promotes the development of the industry. Recently, ex-Congressman Ron Paul said that the crypto business is interested in cooperation with the authorities. Bank of America Strategy Department specialists believe that the regulation of the cryptocurrency market will increase confidence and increase its capitalization to a record.
Source: Bits
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