Lawmakers in the U.S. Urged to Regulate Crypto Before the Next Crisis
A U.S. Treasury official has warned that lawmakers in the U.S. need to take action to develop standards and regulations for cryptocurrencies before the next financial crisis hits. Graham Steele, Treasury Assistant Secretary for Financial Institutions, emphasized that after each crisis, new regulations are adopted, and for crypto, policymakers have the opportunity to act proactively. He stressed the importance of adopting higher standards that support responsible innovation without undermining existing regulatory foundations. Steele made these remarks during an event hosted by George Washington University Law School.
The Government’s Approach to Digital Assets
Lawmakers in Washington have been actively working on bills to regulate the crypto industry, and President Joe Biden released an executive order in 2022 outlining a whole-of-government approach to digital assets. The order focuses on areas such as consumer protection, financial stability, climate risks, and national security. The Treasury was tasked with writing reports on various aspects of crypto and emphasized the need for federal regulatory agencies to monitor the sector and issue guidance and rules.
The Use Cases of Crypto
Graham Steele discussed the potential use cases of cryptocurrencies, highlighting cross-border payments, faster and lower-cost settlements, and immutable ledgers as promising areas. However, he also criticized speculative assets like Dogecoin. He stated that it’s less about trading such assets and more about how cryptocurrencies can solve real-world problems.
Hot Take: Striking a Balance Between Regulation and Innovation
Graham Steele’s call for lawmakers to regulate crypto before the next crisis highlights the need for proactive action in developing standards for the industry. While responsible innovation is essential, it should not come at the expense of robust regulatory foundations that protect consumers and maintain financial stability. Striking a balance between regulation and innovation will be crucial for the future of cryptocurrencies. As the government continues to address the risks and benefits of digital assets, it must also focus on fostering a supportive environment for legitimate use cases and advancements in the crypto space.
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