U.S. Treasury Department Assistant Secretary for Financial Institutions Graham Steele issued a warning today, urging authorities to develop standards to regulate cryptocurrencies before the next financial crisis occurs.
Speaking at an event organized by George Washington University School of Law, Steele reminded that after each financial crisis, new regulations such as the Dodd Frank Act and the National Bank Act were adopted. For crypto, policymakers have a unique opportunity to act proactively, he noted.
In his statement, Steele said:
“For crypto assets, policymakers have the opportunity to act before a crisis to adopt higher standards that support responsible innovation. At the same time, it is critical that any proposed legislation does not undermine the already solid regulatory foundations that apply to financial institutions and capital markets.
“Our report noted that the United States generally has strong investor and consumer protection laws that address many of the risks posed by crypto assets.
“Where existing laws and regulations apply, they need to be robustly enforced to ensure that crypto assets and services, and the consumers who use them, are subject to the same protections and principles as other financial products and services.”
Steele also touched on potential use cases for crypto, emphasizing that cross-border payments, faster and lower-cost payments, and immutable ledgers are the most promising areas.
Last week, in a historic development, Bitcoin Spot ETFs were approved.
*This is not investment advice.