US Treasury Recommends Lawmakers Decide Which Regulators Will Oversee Crypto Cash Market

"The report recommends the passage of legislation providing regulatory authority to federal financial regulators in this market," said the economist Jonathan Rose.

Officials from the United States Financial Stability Oversight Council, or FSOC, have recommended that U.S. lawmakers pass legislation to determine which "regulatory authority" will be responsible for regulating certain parts of the market in the crypto cash.

In an Oct. 3 meeting of the FSOC, Jonathan Rose, senior economist at the Federal Reserve Bank of Chicago, said the FSOC had released a report pursuant to President Joe Biden's crypto executive order, detailing the risks potential for financial stability. digital assets and regulatory loopholes. The report identified regulatory gaps, including the spot market for crypto assets that were not securities subject to “limited direct federal regulation” – hinting that lawmakers were stepping in to prevent potential market manipulation and conflicts. interest.

“While some companies in the crypto asset ecosystem have attempted to avoid regulation, other companies have engaged with the existing regulatory system by obtaining charters of trust or special charters or licenses specific to state-level crypto assets,” Rose said. "The report recommends the adoption of legislation providing regulatory authority to federal financial regulators in this [cash] market."

According to Rose, cryptocurrencies could pose risks to the financial stability of the US economy “under certain conditions” – including growth without corresponding regulatory checks and balances. He also mentioned crypto companies operating through affiliates or subsidiaries, apparently obscuring the offerings from regulators' eyes, and discussed whether firms should be allowed to offer services through intermediaries, including including "futures brokers and commission agents".

In a prepared statement for the board meeting, Treasury Secretary Janet Yellen said:

"These reports provide a solid foundation for decision makers as we strive to mitigate the risks of digital assets while realizing the potential benefits. They also provide a valuable addition to the public's understanding of digital assets." /p>

The council's recommendations see...