Regulating crypto assets would protect ‘the rest of us’: Fed’s Waller

The representation of the cryptocurrency is placed on the US dollar bill in this figure taken on November 28, 2021. REUTERS / Dado Ruvic

June 3 (Reuters)-Federal reserves need better regulation of the world of fast-growing crypto assets, not to prevent the rich from losing money, but for everyone else. The Fed’s Christopher Waller said on Friday.

“The main issue with crypto asset regulation is not how to protect sophisticated crypto investors, it’s how to protect the rest of us,” Waller said of SNB on crypto assets and financial innovation in Zurich. Said in a statement prepared for delivery to the CIF conference.

In particular, he said, the purpose of the regulation is “to protect society from the often irresistible pressure of socializing investor losses with limited resources and to limit the spread of financial stress.”

Over the last five years, crypto assets have surged from a niche market of around $ 14 billion to an industry of $ 3 trillion.

Recently, some collapses that have attracted attention in the crypto world have increased the need for better guardrails for essentially unregulated markets. One reason: their popularity. According to a recent Fed survey, about 12% of adults in the United States have used or owned cryptocurrencies over the past year, primarily for investment purposes. Other studies suggest that the number of crypto users is even higher.

In March, President Joe Biden gave the industry to the Treasury and other institutions, even though central banks around the world, including the federal government, were considering the possibility of creating central bank-backed digital currencies. Instructed to start considering the best way to regulate.

Waller is one of the Fed’s people who said there was no reason to issue a central bank digital currency that competes with privately-backed digital currencies.

On Friday he explained why these privately-backed currencies need better scrutiny, despite industry debates that markets should be left to their own devices to drive more innovation. Did.

Report by Ann Safir Edited by Chizu Nomiyama

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