Crypto

Fed’s Brainard: Crypto Finance Needs Tough Regulation

Nov 14 (Reuters) – Recent turmoil in the cryptocurrency market shows the need for it to be tightly regulated in the same way as traditional finance, Federal Reserve Vice Chairman Lael Brainard said on Monday.

“It’s really concerning to see that retail investors are really affected by these losses,” Brainard said in an interview with Bloomberg in Washington, reiterating his long-standing view that crypto finance needs a little help. strict regulations.

While the crypto industry has presented digital assets as fundamentally different from traditional finance, Brainard argued that the sector has proven susceptible to the same risks and should be subject to the same rules.

“Despite a lot of the hype…you’ve heard a lot about the decentralization of these markets…it turns out they’re very concentrated, very interconnected, you just see a domino effect, the failures of a platform spreading elsewhere,” Brainard continued. “It reinforces, I think, this need to ensure that crypto finance, because it is no different from traditional finance in the risks it exposes, needs to be under the regulatory perimeter.”

Bitcoin and other cryptocurrencies were under pressure on Monday after crypto exchange FTX’s collapse last week, as rival exchanges sought to reassure nervous investors of their own stability. {nL4N32A0P7}

“There need to be strong regulatory safeguards,” Brainard said, noting that this could include bringing some crypto-finances into compliance with existing rules and, in some cases, expanding regulation.

Brainard has previously said that national and international cooperation will be needed to ensure compliance with existing regulations and adapt new ones.

Reporting by Lindsay Dunsmuir;

Our standards: The Thomson Reuters Trust Principles.

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