- Federal Reserve Vice Chair Lael Brainard said Friday that regulation is needed or the industry could become a wider danger to the financial system.
- The lack of regulation guidelines has been a confusing and troublesome issue for the crypto industry.
- Despite this year’s crash in the price of bitcoin, U.S. regulators continue to call attention to the industry’s potential, growth and reach, as well as the potential consequences of not having a clear framework for it.
Federal Reserve Vice Chair Lael Brainard became the latest official to speak out on crypto, saying Friday that regulation is needed or the industry could become a wider danger.
“Innovation has the potential to make financial services faster, cheaper and more inclusive, and to do so in ways that are native to the digital ecosystem,” she said in a speech at a Bank of England conference in London. “It is important that the foundations for sound regulation of the crypto financial system be established now before the crypto ecosystem becomes so large or interconnected that it might pose risks to the stability of the broader financial system.”
The lack of regulation guidelines has been a confusing and troublesome issue for the crypto industry, whose participants are keen to develop and expand businesses but are unclear on the regulatory parameters within which they can do so.
Despite this year’s crash — the price of bitcoin is currently about 70% below its November all-time high of $68,982.20 — U.S. regulators continue to call attention to the industry’s potential, growth and reach, as well as the potential consequences of not having a clear framework for it.
Brainard’s comments come a month after Sens. Cynthia Lummis (R-Wyo.) and Kirsten Gillibrand (D-N.Y.) introduced legislation to create a regulatory framework for crypto that would empower the Commodity Futures Trading Commission to regulate most of the industry.
Earlier this year, President Joe Biden announced an executive order on cryptocurrencies that attempted to fix the lack of a framework for crypto development in the U.S.
