Cryptocurrency adoption in the US is currently at a record high due to increased investor awareness. However, the increased adoption of cryptocurrencies has also attracted the attention of regulators who now want to bring more regulations to the sector.
The US Deputy Treasury Secretary, Wally Adeyemo, is calling for regulatory clarity in matters to do with cryptocurrencies.
Need for stablecoin regulations
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In an interview with CNBC, Adeyemo also talked of the issue with stablecoins and how they posed a risk to financial stability. He mentioned the recent task force headed by US Treasury Secretary, Janet Yellen, looking into stablecoins and how these assets can be regulated.
Adeyemo mentioned that stablecoins posed not only a financial stability risk but also a national security risk. He noted that if a set of rules were applied globally to curb money laundering and terrorism financing, it would ensure that crypto assets at large are included in the same regime as traditional financial institutions.
He also noted that innovations in the financial sector would still exist because the existing regulatory framework allowed innovations to occur. However, regulators were still tasked with protecting national security to ensure that while innovations were happening, there was still a need to put the necessary safeguards to protect investors.
Crypto regulatory framework in the US
Since China banned crypto mining and trading, the US has become a major hub for the same. Currently, the US accounts for the largest percentage of Bitcoin mining hashrate. Moreover, the US Securities and Exchange Commission (SEC) recently approved several Bitcoin futures exchange-traded funds.
Despite the progress, the US is battling with formulating a solid and clear crypto regulatory framework. The US Congress recently passed an infrastructure bill that calls for taxing crypto brokerage firms and other parties that operate in the sector.
In terms of decentralized finance, the US is also looking to introduce regulations that will protect investors and ensure that firms that operate in the DeFi sector meet their regulatory requirements. The chief of the US SEC, Gary Gensler, has been adamant about seeing regulations introduced in the DeFi sector.
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