Summary
Lawmakers in the U.S. need to establish regulations for cryptocurrencies before the next crisis, according to a U.S. Treasury official. The official emphasized the opportunity for policymakers to adopt higher standards that support responsible innovation in the crypto industry. However, any legislative proposals should not undermine the existing regulatory foundations for financial institutions and capital markets. President Joe Biden’s executive order in 2022 directed the Treasury to address the risks and benefits of digital assets, including consumer protection, financial stability, climate risks, and national security. The Treasury’s report from 2022 called for monitoring the crypto sector for bad actors and issuing guidance and rules. The official also highlighted potential use cases for cryptocurrencies, such as cross-border payments and faster settlement, while criticizing speculative assets like Dogecoin. Meanwhile, at the World Economic Forum in Davos, crypto executives discussed the need for technologies to solve real-world problems, questioning the purpose of assets like Dogecoin.
Key Points
1. Lawmakers in the U.S. need to develop standards to regulate crypto before the next crisis, according to a U.S. Treasury official. This is important because after each financial crisis, new regulations are adopted, and policymakers have the opportunity to act before a crisis happens.
2. The U.S. Treasury Assistant Secretary for Financial Institutions, Graham Steele, emphasized the importance of adopting higher standards for crypto-assets that support responsible innovation. However, any legislative proposals should not undermine the existing regulatory foundations that apply to financial institutions and capital markets.
3. The use cases behind crypto include cross border payments, faster and lower cost settlement, and immutable ledgers. These areas were identified as the most promising in a report by the Treasury Department. Steele also criticized speculative assets like Dogecoin, highlighting the need for technologies that can solve real-world problems.
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