Fed Vice Chair Calls for Accelerating Crypto Regulatory Framework

Brainard said crypto investment carries the same risks as traditional finance.

Fed Pressure Continues to Increase

U.S. Federal Reserve Vice Chairman Lael Brainard stated that the regulatory framework for the crypto industry must be completed quickly before the sector spirals out of control.

Brainard has issued a call to speed up implementation of legal rules for cryptocurrencies as many investors have suffered significant losses recently. Brainard referenced an extensive list of failures in the blockchain sector over time.

The Fed’s vice chairman argued that the shortcomings of the cryptocurrency industry are essentially the same as those of traditional finance, so the same safety standards need to be met before crypto is large enough to pose a threat to the system of global finance.

“New technology and financial engineering cannot convert risky assets into safe assets on their own. Recent tensions have revealed the vulnerabilities and knock-on effects of crypto platforms.” Brainard said. “The proof is that during the past time, the market has continuously received notices of freezing withdrawals from some lending platforms and some of the many institutions have had to file for bankruptcy.”

Brainard said the development of a U.S. Central Bank Digital Currency (CBDC) could enhance stability in the crypto industry, although she had said two months ago that the process of creating a digital USD could take up to 5 years and CBDC could coexist with stablecoins.

Based on a March report from the International Monetary Fund (IMF), around 100 countries are currently exploring CBDC at various levels. Therefore, the U.S. will fall into a state of “at-risk” if it does not act quickly.

Source : bsc.news

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