Crypto News Now: Is Regulation the Way Forward?

Recent developments or “crypto news now” covers remarks made by Treasury Secretary Janet Yellen on digital asset policy, innovation and regulation at the Kogod School of Business Center for Innovation.

Areas to work on

She believes the crypto industry should follow similar rules and regulations as the traditional financial system. Yellen highlighted these areas that need to be worked on:

• the financial system
• benefits from responsible innovation
• the dangers for vulnerable people if regulation does not go hand in hand with innovation
• activities focused on risks rather than technologies
• how the United States will benefit from the current role of the dollar

This comes after President Joe Biden signed an executive order in March authorizing federal agencies to conduct a blueprint of policies and regulations on digital assets, including cryptocurrency. The executive order outlines what government agencies must do to develop cryptocurrency policies and regulations and ensure that U.S. cryptocurrency laws align with those of its allies. It also instructs the Financial Stability Supervisory Board to investigate any prohibited financial activity. Additionally, the order brings back the possibility of a new government-issued central bank digital currency.

The government should “take a step back”

During his remarks, Yellen said the Treasury will work with the White House and other agencies to develop reports and recommendations on digital currencies over the next six months. She said the current sentiment is that technology is so radically and beneficial that the government should step back and let innovation take its course. However, skeptics see limitations and argue that the government is taking a more restrictive approach. She said the same things that have brought clear benefits for economic growth from a traditional financial perspective should help guide their approach to digital assets.

SEC Show support

the Securities and Exchange Commission (SEC) Chairman Gary Gensler appears to support this position by announcing several initiatives aimed at providing additional protection for investors in the $2 trillion cryptocurrency market. It has announced its intention to register and regulate crypto exchanges and explore the separation of custody of assets to minimize investor risk. As currently, crypto exchanges primarily take custody of their clients’ assets, which increases the chances of large-scale attacks. Last year, it is reported, fraudsters stole $14 billion worth of crypto. It also announced plans to partner with the Commodity Futures Trading Commission to address platforms trading crypto-based security tokens and commodity tokens. Gensler adds that the crypto market shouldn’t be treated differently because of the different technologies in use. They perform similar roles to traditional regulated exchanges and therefore investors should be similarly protected.

Many industry experts believe that increased regulation could increase market stability as well as the price and value of crypto, increase investor protection in the market, prevent fraudulent activity, and provide clear direction for innovation. . They also believe that investors should invest in Bitcoin or Ethereum as they have a track record of increasing in value, although they are highly volatile with daily and hourly price fluctuations.