- On Monday, top officials proposed several new safeguards to ensure that the cryptocurrency business does not endanger the integrity of the US financial system.
- On Monday, the members of the Financial Stability Oversight Council convened and approved the conclusions of a 125-page study conducted in response to President Joe Biden’s executive order.
- In light of a UN study, the Biden administration has urged Congress to expedite the development of a regulatory framework for cryptocurrencies and digital assets.
Top US authorities suggested several new protections on Monday to make sure that the stability of the US financial system is not jeopardized by a developing and unregulated cryptocurrency industry.
Regulators urged Congress to enact legislation to address the systemic risks brought on by the rise of stablecoins, a type of cryptocurrency tied to the price of another financial asset, such as the US dollar or gold, as one of their seven main recommendations.
As the usage of the digital asset continues to rise due to recent volatility in the cryptocurrency market, particularly in stablecoins, regulators are particularly wary about the need for regulation.
The Financial Stability Oversight Council members met on Monday and endorsed the findings of 125-page research produced in response to President Joe Biden’s executive order on digital assets in March. The study also recommends giving governments more power to control digital assets like virtual currency.
The oversight council, an interagency body run by Treasury Secretary Janet Yellen, is composed of Jerome Powell, the chairman of the Federal Reserve. The council, which was founded in the wake of the 2008 financial crisis, was created to identify weak points and fresh threats to the integrity of the US financial system.
The Biden administration has pushed Congress to hasten the creation of a regulatory framework for cryptocurrencies and digital assets in light of a UN report that foresees a Fed-induced global recession.
Americans are coming under more and more pressure to expedite the regulation of cryptocurrencies; officials have cautioned that any delays could endanger investors.
In a report released last month, the Treasury Department suggested that the US concentrate on creating a digital currency.
The Treasury, according to Yellen, advises the US to “advance policy and technical work on a prospective central bank digital currency or CBDC, so that the US is prepared if CBDC is decided to be in the national interest.”