Biden Administration Urges Congress To Accelerate Crypto Rules

The Biden administration has called on Congress to pass new laws to clarify how cryptocurrencies should be regulated, as officials warn delays on Capitol Hill could put investors at risk.

The US Financial Stability Supervisory Board – a group of the country’s top financial regulators, including the Treasury – released a report on Monday urging politicians to agree on a number of different areas, including how to regulate bitcoin. and other crypto assets sold in the spot market.

The report comes as members of Congress debate new proposals covering everything from the $140 billion stablecoin industry to tax rules for crypto brokers. But while Biden administration officials worry about a repeat of the collapse of the now infamous stablecoin TerraUSD, those close to the negotiations in Congress say they are still months away from passing the bill. new legislation.

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The FSOC report also comes as the crypto industry reels from a historic price slump, with several high-profile companies falling into bankruptcy, raising questions about who should provide chief oversight to volatile crypto markets. cryptography.

Regulators such as the Securities and Exchange Commission and the Commodity Futures Trading Commission continue to push for jurisdiction over the industry. SEC Chairman Gary Gensler has argued that most cryptocurrencies – and the platforms they are traded on – should be regulated by the SEC, as many tokens are considered securities under US law.

A Treasury official said the report’s authors — including Gensler and CFTC Chairman Rostin Behnam — did not intend to back one agency over another.

The report warned that many crypto-asset businesses lack “basic risk controls to protect against run risk or to help ensure that leverage is not excessive.” prices have repeatedly recorded significant and widespread declines”.

The FSOC report also suggests inter-agency cooperation to close the existing gaps that allow crypto asset firms to find the most favorable regulation for their business.

“Some crypto asset firms may have affiliates or subsidiaries operating under different regulatory frameworks, and no single regulator may have visibility into risks across the enterprise.”

To that end, the FSOC has recommended that Congress pass rules that would give federal market regulators the power to make rules in markets for crypto assets that are not covered by existing U.S. securities laws.

The rules should cover conflicts of interest, abusive business practices, segregation of client assets, cybersecurity and record keeping.

The council report also calls on Congress to pass legislation allowing regulators to have visibility into crypto platform subsidiaries, as well as creating a federal framework for stablecoin issuers.

The group of regulators added that while traditional finance’s exposure to crypto activity is limited, it could “rise rapidly.” Stablecoin activity, leveraged trading, and asset custody are cited as examples of the potential interconnection between traditional finance and crypto. This summer, crypto exchange Coinbase struck a deal with asset management giant BlackRock to give the latter’s clients easier access to crypto.

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Biden Administration Urges Congress To Accelerate Crypto Rules

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