A high-ranking official at the US Treasury has called upon lawmakers to take immediate action concerning crypto regulation to avert any potential future financial crises preemptively.
Graham Steele, the Treasury Assistant Secretary for Financial Institutions, argued that the world of crypto offers a unique opportunity for policymakers to institute comprehensive standards before a crisis unfolds, thereby fostering responsible innovation.
However, Steele emphasized the need to strike a delicate balance, ensuring that any regulatory measures put in place do not undermine the already robust regulatory framework governing financial institutions and capital markets.
Speaking at an event hosted by the George Washington University Law School, Graham Steele provided insights into his two-year tenure at the Treasury Department, where he has overseen areas such as cybersecurity, crypto, and capital markets.
The urgency of crypto regulation has gained prominence on Capitol Hill, with legislators actively crafting bills aimed at reining in the rapidly evolving cryptocurrency industry.
President Biden Endorses Crypto Regulatory Efforts
President Joe Biden has also endorsed the growing attention toward crypto regulation.
In 2022, he issued an executive order outlining a comprehensive, whole-of-government strategy for addressing the risks and harnessing the potential benefits of digital assets and their underlying technology.
The executive order specifically targeted key areas such as consumer protection, financial stability, climate-related risks, and national security concerns tied to the crypto sphere.
Moreover, the order tasked the Treasury with producing various reports, one of which was devoted to regulating cryptocurrencies.
The 2022 Treasury report called for federal regulatory agencies to closely monitor the crypto sector for illicit activities and offer guidance and rule-making as necessary.
Graham Steele underscored the robustness of existing investor and consumer protection laws in the United States, which he believes can effectively address many of the risks associated with crypto-assets.
He emphasized the importance of stringent enforcement of these laws, ensuring that crypto-assets and related services, along with their users, are afforded the same level of protection and adherence to regulatory principles as other traditional financial products and services.
Crypto Regulation Can Bring Forward More Use Cases
Steele also took the opportunity to delve into the potential use cases for cryptocurrencies.
He highlighted several prospective areas of promise, including cross-border payments, expedited and cost-effective settlement processes, and the immutable nature of blockchain ledgers.
“Those feel like the areas, at least in our report, that we said were the most promising,” Steele said. “So it’s less about the crypto asset itself.”
Steele took a dig at Dogecoin, calling assets like that speculative.
“It’s less about — I don’t even know if Dogecoin is still a thing or not, but it’s less about trading some of those things,” Steele said.
On a separate stage at the World Economic Forum in Davos, Switzerland, prominent figures in the crypto industry weighed in on the ongoing debate surrounding the lack of major use cases for cryptocurrencies.
Ripple CEO Brad Garlinghouse, for instance, cited his company’s focus on resolving cross-border settlement challenges while acknowledging the speculative nature of the sector.
Garlinghouse also expressed skepticism about certain cryptocurrencies, such as Dogecoin, and questioned their practical utility.
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