The Pressure On the Cryptocurrency Market Is Growing! What Experts Think About the Situation in USA
As the regulatory pressure on the cryptocurrency sector increases in the US, more policymakers are wondering if the current control system is adequate.
In an article for the Wall Street Journal, former Securities and Exchange Commission chairman Jay Clayton and former Deputy Treasury Secretary Brent McIntosh defended the U.S. cryptocurrency regulatory apparatus.
They also warned that the excessive rulemaking could stifle innovation.
Clayton served as head of the SEC from May 2017 to December 2020. He explained that the agency did not regulate Bitcoin, as the asset was declared not valuable before Clayton took over as head of the agency. Clayton remained in the industry after leaving the SEC and currently advises One River Asset Management on cryptocurrencies.
McIntosh was Deputy Treasury Secretary for International Affairs from September 2019 to January 2021, and previously served as General Counsel to the Treasury Department from 2017 to 2019.
In the US, cryptocurrencies have come under the spotlight of regulators after two ransomware attacks. The attacks were so devastating that last weekend, two senators discussed the prospect of completely banning cryptocurrencies for ransomware hackers.
Clayton and McIntosh emphasized that it is particularly challenging to find a pragmatic regulatory balance that provides basic consumer protection but does not constrain the growth of the cryptocurrency industry. They are concerned that the sector could easily be subject to excessive or inadequate oversight by regulators. But they noted that the current system works well:
“Existing regulatory frameworks provide the tools to address many of the risks of new technologies without stifling their promise.”
They advised the relevant authorities to direct their efforts towards achieving core goals such as financial stability and the prevention of fraud and illegal activities.
The experts said that it is necessary to take a coordinated approach to maintaining the leadership of the US financial system:
“A prompt, coordinated approach to regulatory clarity that builds on our existing knowledge base will empower responsible innovation and ensure that the U.S. financial system continues its leadership role in the formation of capital, the provision of credit, and the maintenance of stability on which the modern global economy depends.”
But it looks like government officials are still pushing for tighter regulation in the cryptocurrency space. Treasury Secretary Janet Yellen said in February that cryptocurrency abuse is becoming a growing problem.
And SEC Chairman Gary Gensler hinted in early May that it is worth strengthening regulatory oversight of cryptocurrency exchanges in the United States.