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Crypto News Now: is Regulation the Way Forward?

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Recent developments or ‘crypto news now' cover the remarks delivered by Treasury Secretary Janet Yellen on digital assets policies, innovation, and regulation at the Kogod School of Business Center for Innovation.

Areas to be Worked On

She believes that the crypto industry should follow similar rules and regulations as the traditional financial system. Yellen highlighted these areas that need to be worked on:

• the financial system • benefits from responsible innovation • the dangers to vulnerable individuals if regulation is not in tandem with innovation • activities focusing on risks rather than technologies • how the USA will benefit from the dollar's current role

This comes after President Joe Biden signed an executive order in March allowing federal agencies to conduct a plan for policies and regulations on digital assets, including cryptocurrency. The executive order outlines what government agencies must do to develop policies and regulations on cryptocurrencies and ensure US cryptocurrency laws align with those of its allies. It also commissions the Financial Stability Oversight Council to investigate any forbidden financial activities. Additionally, the order brings back the possibility of a new government-issued central bank digital currency.

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Government should 'Take Step Back'

During her address, Yellen stated that the Treasury would work with the White House and other agencies to develop reports and establish recommendations on digital currencies over the next six months. She said the current sentiment is that the technology is so radically and beneficially transformative that the government should step back entirely and let innovation run its course. However, skeptics see limitations and support the government taking a more restrictive approach. She said that the same things that have brought clear benefits for economic growth from a traditional finance point of view should help guide their approach toward digital assets.

SEC Show Support

The Securities and Exchange Commission (SEC) Chairman Gary Gensler seems to support this stance as he announced several initiatives to bring additional protection to investors in the $2 trillion cryptocurrency market. He announced his plans to register and regulate crypto exchanges and explore separating asset custody to minimize investor risk. As currently, crypto exchanges mostly take custody of their customers’ assets, increasing the chances of large-scale attacks. Last year, it is reported, fraudsters stole $14 billion in crypto. He also announced plans to partner with the Commodity Futures Trading Commission to address platforms trading crypto-based security tokens and commodity tokens. Gensler adds that the crypto market should not be treated differently due to the different technology used. They play roles similar to traditional regulated exchanges and, therefore, investors should be protected similarly.

Many industry experts believe more regulation could increase market stability and the price and value of crypto, increase investor protections in the market, prevent fraudulent activity, and provide clear guidance for innovation. They also believe that investors should invest in Bitcoin or Ethereum as they have a track record of increasing in value, despite being highly volatile with price fluctuations by the day and hour.

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Author: Emmanuel Baiden

Author: Emmanuel Baiden

7 years experience within the financial services sector most notably in Sales, Trading, research and writing articles within the crypto space. I have a bachelor's degree in International Business and a Master's in Investment and Risk Finance . I am also an associate member of the Chartered Institute for Securities and Investment.

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