- The United States is assembling a crypto team.
- This team will watch the industry closely for relevant developments.
- The team will reflect these developments onto the nation’s crypto regulations.
The US continues on its mission to bring their version of calm in the chaotic realm of crypto regulations. The country believes that cryptocurrencies and stablecoins are a great technical innovation, but it still needs regulations to protect consumers.
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Therefore, the US Federal Reserve plans to establish a dedicated team of experts to monitor developments in the cryptocurrency sector, particularly in response to concerns surrounding unregulated stablecoins.
This crypto team was put together by the US Federal Reserve’s Vice Chair for Supervision, Michael Barr. Barr emphasized the importance of appropriate regulation to protect both households and the financial system, while also recognizing the potential transformative impact of crypto on the industry.
The new team will enable the Federal Reserve to keep up to date with innovation in the sector and learn from new developments. The Vice Chair also cautioned against over-regulation that could stifle innovation, while highlighting the risks associated with under-regulation, particularly in the case of stablecoins.
Innovation always comes quickly, but it takes time for consumers to become aware that they could both gain and lose money on new financial products.
Barr says the team will help learn from the latest developments in the sector to ensure that the nation and its regulations can stay on track with the industry’s latest innovations. In addition, he says the goal is to attain a balance between over-regulation and under-regulation.
Ultimately, Barr wants to maintain this balance so as to avoid stifling innovation and allow ample opportunity to keep harm from financial systems and consumers. Lastly, he draws light to the growing issues of stablecoins saying “mismatch in value and liquidity is the recipe for a classic bank run”.
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