A new report from the Financial Stability Oversight Council today warned of the dangers that cryptocurrencies and other digital assets “if their interconnections with the traditional financial system or their overall scale were to grow without adherence to or being paired with appropriate regulation.”
The Treasury Department is seeking public input regarding illicit finance and national security risks posed by digital assets.
Current banking conditions remain “mostly stable, but there are concerns over the longer term given current economic conditions,” members of the Federal Reserve’s CDIAC said during a meeting that took place earlier this year, according to newly published minutes.
Oversight and supervision should be applied to banks and nonbanks engaged in digital asset activities alike to ensure all customers are protected equally.
The request follows an executive order directing agencies to report on the implications of the development and adoption of digital assets, as well as changes in financial market and payment infrastructures.
After several weeks of upheaval in the cryptocurrency market—including prominent stablecoins like TerraUSD and USDD breaking their U.S. dollar pegs—Treasury Secretary Janet Yellen reiterated her call for a regulatory framework for stablecoins.
The Basel Committee on Banking Supervision today issued its second consultation on the regulatory treatment of digital assets, including cryptocurrencies.
As U.S. policymakers consider how to regulate digital asset technologies, ABA called on them to “remain vigilant and deliberate” to “ensure that our regulatory environment supports innovation rather than overregulating or replacing private sector innovators” in a comment letter to the Commerce Department.
Amid the growing ownership of digital assets like cryptocurrencies, the American Bankers Association and the Securities Industry and Financial Markets Association on Friday asked the Securities and Exchange Commission to provide key clarifications and delay the effective date of its staff accounting bulletin on crypto assets.
According to ABA, at present, a U.S. CBDC doesn’t solve a specific financial problem or respond to a pressing economic need.