The U.S. Treasury has warned that unregulated cryptocurrencies could come back to haunt the United States and its financial workings. The Treasury Is Terrified of Crypto The Treasury has been engaged in digital currency research for some time given that back in March, Joe Biden issued a crypto executive order calling for all financial agencies within the United States to examine and explore the risks and alleged advantages associated with digital currency assets. The order also potentially opened the door to a digital version of USD. It’s unclear if the statement regarding unregulated crypto is a result of hardcore research, though the Treasury seems intent on regulating the space with all its might. Perhaps this is just an excuse to get the ball rolling in that
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The U.S. Treasury has warned that unregulated cryptocurrencies could come back to haunt the United States and its financial workings.
The Treasury Is Terrified of Crypto
The Treasury has been engaged in digital currency research for some time given that back in March, Joe Biden issued a crypto executive order calling for all financial agencies within the United States to examine and explore the risks and alleged advantages associated with digital currency assets. The order also potentially opened the door to a digital version of USD.
It’s unclear if the statement regarding unregulated crypto is a result of hardcore research, though the Treasury seems intent on regulating the space with all its might. Perhaps this is just an excuse to get the ball rolling in that direction and give itself more power over an industry that was built on the notion of financial freedom for all.
The Treasury has released a new report detailing its recent findings. Janet Yellen – the Treasury Secretary – explained in a statement:
The report concludes that crypto asset activities could pose risks to the stability of the U.S. financial system and emphasizes the importance of appropriate regulation, including enforcement of existing laws. It is vital that government stakeholders collectively work to make progress on these recommendations.
The report was issued by the Treasury’s Financial Stability Oversight Council, which also mentioned that stable coins present more vulnerabilities than many traders think. The organization further claimed that lending and borrowing in the crypto space are dangerous.
The notion of regulation in the crypto space is something of a two-sided coin (pardon the pun). On the one hand, to a degree, it can be argued that some regulation is necessary. Right now, the crypto space is wrought with crime and illicit activity. There are too many fraudulent schemes out there from romance scams to rug pulls, and it might be nice to have a few rules in place to ensure bad actors always get what’s coming to them and traders remain protected against negative actions.
Regulation Goes Against Crypto’s Initial Goals
At the same time, the idea of prying eyes and third parties overseeing the crypto space goes against everything it was built on. Digital currency traders first flocked to the space because they believed they would gain financial independence in doing so. This independence runs the risk of dissipating or drying up fast if the government is to have its way and oversee all digital asset activity.
In any case, the Treasury department is now recommending a whole new slew of regulatory tactics for the growing crypto space. One of the big things it wants to implement are “exams” that will be provided to financial institutions seeking to offer crypto custody services. If they cannot pass these exams, they cannot delve in crypto regardless of their other qualifications.