As a parliament Consider the law regarding Civil StubcoinSecurities and Exchange Commission on April 4th release Particular stability from the burden of registering as a securities, especially when fully backed up by high quality liquid assets such as the Ministry of Finance.
If you’ve followed for the last 16 years, you know that cryptocurrencies have been able to avoid most of the difficult rules that have to follow the broad constellations of financial companies. For these purposes, including stable coins in the same bucket, and stub coins are not monitored and offered, and therefore include floating speed cryptocurrencies that are not backed. A good reason In the past, they are supposed to maintain high quality support.
With a large number of crypto scandals unfolding, it’s not that there’s no discussion about regulating them, and nothing is produced that is viable. This is mainly excluding the effects of Millions of Campaign Contribution Policymakers created by Crypto executives act as if they were trapped in the system we have, not what we need.
I argued that we should stop wasting precious time wearing shoes in the outdated regulatory categories developed in the 1930s and discuss whether they should be regulated by the Securities and Exchange Commission or the Commodity Futures Trade Commission. Crypto raises the issue of a new 21st century that requires a completely new level and form of regulation.
In February, we proposed that some factors of the recently established president be considered. Working Group on Digital Assets To ensure that assets such as cryptocurrencies do not create a major threat to global financial stability. Among them was the uniqueness of double the money and investment, and the ugly reality that cryptocurrencies evolved to median payments of their choice, trading unparalleled levels of global crime.
But now let’s look at what happens when it comes to events that may not fully address the new risks created by cryptocurrency.
Maintaining economic stability relies on recognizing where confidence and fear intersect, and the role that certainty, transparency and verifiable value plays. The great financial panic of 2008 was a perfect example. The market ultimately rejects the subprime mortgage narrative when the trust in the obscure alchemy of securitization is eroded, and investors rely on borrowers who are unable to pay mortgages or foreclosures on homes where value is rapidly sinking.
Cryptocurrency is even more problematic. Cryptographic speculation is a microcosm of uncertainty underpinned by the theory of the Great Fool. It is impossible to disclose much about financial instruments that are not there and have no liquidation values at all.
recently New York Fed Blog Post It highlights the lack of transparency in proofing stake ethereum blockchains, suggesting that such decentralized financial or “defi” networks could potentially affect the broader financial system, and that even those who have never interacted directly with crypto or defi can have an impact. “This gives a margin to avoid a thin crypto crisis of reliability razors, suggesting that such events will be a race to the bottom.
Economist Robert J. Schiller captures this phenomenon in his 2020 book “The Economics of Story” He distinguishes between an economy driven by a narrative and an economy driven by an economy. This explains the mysteries of how tulip bulbs became the most valuable product in the Netherlands in the 17th century, and trades about the same Six times Average annual salary until the entire card house collapses completely after a few years. Cryptocurrency values are similarly driven by the narrative.
Under these circumstances, the code The 10 trillion dollar industry No serious monitoring. When it gets so big, it becomes almost equal 80% of mortgage obligations Americans have accumulated 56% of total deposits At a US bank. As we know, these businesses are highly regulated. that’s why Reports will be distributed It makes sense to regulate them with an outdated surveillance system rather than allowing them to become unregulated segments that could affect the financial stability of the country.
Early 2022, both Federal Reserve Committee and Financial Stability Monitoring Council It has begun issuing a report warning that the ongoing hints of cryptocurrencies, particularly the ridiculous, have been continually hinted at the bloodstream of the US economy, could lead to widespread destabilization. Catastrophic Frequency Cryptocurrency network hacking (More codes may have been stolen Last few years More than the money taken by bank robbery The past 20 years) And the possibility of operational failure due to severe management (see ftx) Add more to the volatile mixture of risk.
Selling to crypto panic is the only way that holders can achieve any value when confidence is eroded. Just as it happens on the ground, the value of Wall Street’s hundreds of billions of dollars of crypto-inducing devices could be questioned, and the credit line that supports the purchase could disappear. Without government or central bank support, or consumer protection reversed vehicles like federal deposit insurance, it is difficult to stop the cascade effect of such practices.
However, Crypto appears to have returned to its solution simply by growing and becoming an important part of the traditional financial system. So, governments and central banks could save in the bailouts they inevitably offer when traditional financial services markets are threatened by crypto meltdowns.
To that extent, the Treasury and the Federal Reserve are already messing up the crypto industry. They don’t regulate it or get pennies paid for insurance. It’s not the first time the financial industry has enjoyed its luxury. And for those who can use it, it’s a great thing. For cryptography, that may still be the biggest achievement.
Thomas P. Baltanian is a former senior bank regulator, lawyer and executive director of the Centre for Financial Technology and Cybersecurity. he”Impossible Internet” and “200 years of American financial panic. ”
