Daily News | Online News
By Mark Hunter
1 hour agoTue Oct 04 2022 09:55:56
Reading Time: 2 minutes
- A regulatory panel yesterday urged Congress to pass legislation regulating crypto
- The FSOC highlighted three areas of concern that it said congress should address
- Despite several proposals, there has been very little movement to regulate crypto
Yesterday, the Financial Stability Oversight Council (FSOC), a U.S. regulatory panel comprising top financial regulators, asked Congress to pass legislation addressing the risks that digital assets pose to the financial system, including introducing bills to increase oversight of crypto markets and stablecoins. Treasury Secretary Janet Yellen echoed this sentiment, saying that the report “provides a strong foundation for policymakers”, which comes in the wake of president Joe Biden’s executive order on cryptocurrencies in March.
Daily News | Online News Three Regulatory Gaps Identified
In the report, the FSOC panel identified three gaps in the regulation of cryptocurrencies that need to be addresses:
- Limited oversight of the spot market for tokens that are not securities
- Opportunities for regulatory arbitrage, or taking advantage of favourable rules
- Whether crypto firms should be allowed to integrate multiple services traditionally provided by intermediaries, like broker-dealers and clearing houses
In order to help address these gaps, the FSOC suggested several new recommendations for legislators, including the creation of a federal framework for stablecoin issuers to address market integrity and consumer protection, as well as passing a bill to provide rulemaking authority to federal financial regulators with regard to the spot market for cryptocurrencies that are not securities.
This would help address conflicts of interest and abusive trading practices, although of course if the Securities and Exchange Commission (SEC) has its way, all coins except Bitcoin would be classed as securities.
Daily News | Online News Will Anyone Actually Regulate Crypto?
Lawmakers should also consider legislation that gives regulators authority to supervise activities of crypto firms’ affiliates and subsidiaries, the FSOC said, which could address regulatory arbitrage.
Despite the amount of talk about regulating cryptocurrencies, it remains unclear when Congress might actually pass crypto-related legislation. Several bills have been introduced to address stablecoins and digital commodities regulation, but none have so far made any recognisable progress.
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