Biden Administration Calls for Increased Crypto Regulations to Protect Financial Stability
1. The Biden administration has asked the US Congress to expand regulators‘ authority in policing the crypto industry to ensure financial stability.
2. The statement suggested strengthening transparency and disclosure requirements for crypto companies and imposing stiffer penalties for those who violate rules.
3. It discouraged green-lighting mainstream financial institutions like pension funds from crypto exposure.
The Biden administration has recently called upon the US Congress to step up its efforts in regulating the crypto industry. In a statement titled ‚The Administration’s Roadmap to Mitigate Cryptocurrencies‘ Risks‘, four senior White House officials have asked for regulators to be given more authority in order to prevent crypto from damaging financial stability.
The statement also emphasized the importance of protecting investors by creating structures to hold bad actors accountable. To this end, it suggested that Congress strengthen disclosure and transparency requirements for crypto companies, and impose tougher penalties for those who violate the rules. It also warned Congress against green-lighting mainstream financial institutions like pension funds from crypto exposure, as this could deepen crypto’s ties with the global financial system.
The officials cited the fall of LUNA’s stablecoin, UST, and the collapse of FTX, a cryptocurrency exchange, as examples of what makes 2022 a „tough year for crypto.“ They also noted that many crypto entities are already subject to existing laws, and that Congress should take this into consideration when crafting new regulations.
The statement concluded by calling on Congress to take the necessary steps to ensure cryptocurrencies don’t undermine financial stability, while also protecting investors from bad actors. It also highlighted the need for clear rules and regulations that will make the crypto industry more transparent, while also preventing it from becoming too closely intertwined with the global financial system.