What a crazy day it’s been for the crypto community. Since the start of the most severe crypto winter, crypto regulation has been all anyone can talk about. The crypto market had shown signs of improvement earlier, but it was only fleeting. Now, crypto regulators have returned with a new mission: to regulate the cryptocurrency industry. Although, not every legislator and market analyst is on board with this plan.
Not only are United States legislators having difficulty with crypto regulation- but international financial regulators are also in deep crypto regulation waters. These organizations are trying to take control of decentralized finance (DeFi), but they disagree on whether current norms will suffice.
Standard setters think DeFi, which uses software to replicate traditional financial services like lending, is the next step in crypto markets. Regulators, however, have no idea how to manage the hazards involved with DeFi, such as money laundering, cyberattacks, and fraud.
Crypto regulation concerns carry the day
The United States is the world’s leading economic superpower. Due to its status as a Superpower country, each financial decision they make has a global impact. Regulating cryptocurrencies won’t be any different in this regard.
So far, crypto regulation has mostly entailed applying existing regulations to Web3 counterparts like crypto trading platforms or wallet providers that already adhere to them. However, this method is already causing issues, for example, when people hold their own crypto rather than using a licensed company. Additionally, it’s slowly becoming apparent to regulators that this likely will not always be effective.
Furthermore, crypto regulation has been a topic of debate for market analysts. Some people believe that crypto should be treated like any other financial industry and given the opportunity to grow. However, some financial experts, such as Robert Kiyosaki, think crypto is on its way out and should be treated accordingly.
R. Kiyosaki criticizes President Biden’s executive order on crypto, saying it will lead to a dystopian future like the one described in George Orwell’s 1984 novel. Richard is concerned that the true motive for the executive order is to further the development of central bank digital currencies (CBDCs).
This would dramatically expand the power and influence of the federal government […] essentially acting as a new type of “spyware.” Jim this is like George Orwell’s Big Brother is watching, on steroids.
Robert Kiyosaki
SEC’s chair Gary Gensler renews his commitment to regulating crypto
The head of the SEC is going on the offensive against those in the crypto sector that he claims are trying to avoid following securities rules. Gary is back on track to make crypto regulation possible.
Gary Gensler stated on Thursday that he would aid Congress in bestowing more power to the Commodity Futures Trading Commission (CFTC), allowing them authority to oversee bitcoin better. Bitcoin is currently the world’s largest cryptocurrency by market cap.
According to Gensler, this is only possible if “we don’t inadvertently undermine securities laws underlying $100 trillion capital markets.” In other words, he wants to ensure the SEC doesn’t lose any power in the process.
Since long before Gensler took over the agency in April 2021, the SEC has been at odds with much of the crypto industry about whether its rules should apply to more decentralized projects than equities or bonds.
Many investors and crypto experts believe that the CFTC should have more power over crypto regulation. Lawmakers in both parties, as well as some Wall Street voices, are now discussing a number of bills that would significantly expand the CFTC’s authority over digital assets.
Some securities attorneys argue that passing those pieces of legislation would infringe on the SEC’s domain over the asset class. Additionally, Gensler asked that firms that assist with transaction management in the crypto market register with the SEC, just as other market intermediaries do.
On Thursday, Gensler said any crypto regulation legislation should be done in a way that maintains the SEC’s oversight of “crypto security tokens.” He added that those assets make up the bulk of digital assets that are currently traded.
The United States crypto market – happenings
The crypto market in the United States is presently flooded with more than just crypto regulation. On Thursday, Federal Reserve Board Chair Jerome Powell called for stablecoin legislation during a speech at a conference.
Powell’s remarks follow after a failed push to release a draft stablecoin bill over the summer.
We don’t want to stand in the way of appropriate innovation […] But we think that something like that which is purporting to be money would need to be appropriately regulated […] I think you need regulation. If people are going to think something is money it needs to have the qualities of money. I don’t think you want to take money and make it into just another consumer product.
Jerome Powell
In other news, six cryptocurrency users sued the U.S. Treasury Department for blacklisting Tornado Cash last month. The individuals claim that the department’s sanctions monitor exceeded its bounds, barring all American citizens from using the privacy software.
The plaintiffs, who are also suing Treasury Secretary Janet Yellen and OFAC Director Andrea Gacki, allege a violation of their First Amendment rights to “engage in important, socially valuable speech.”
Source: https://www.cryptopolitan.com/u-s-legislators-split-on-crypto-regulation/