A panel of top US regulators from Congress is set to pass laws to enable more direct oversight of cryptocurrency markets and for overall regulation of stablecoins, according to its latest report focusing on digital assets.
The Financial Stability Oversight Board also recommended Congress pass a law to increase the transparency of digital asset projects for different regulators, in order to allow regulators across different jurisdictions to better coordinate and understand crypto markets and activities, according to Investing.com.
The Board considers that digital asset activities can pose risks to the stability of the US financial system if their link to the traditional financial system or their overall size grows without appropriate regulation, including enforcement of the existing regulatory structure,
According to the report, the board singles out the bankruptcy of the hedge fund Three Arrows Capital and the collapse of TerraUSD as events that indicate instability in the digital asset sector, which supports the need for legislation and increased regulation of crypto-related businesses.
The House unanimously approved the report and Congress will actually begin work on legalizing stablecoin and spot market earlier this year. Where an official in the administration of US President, Joe Biden, said that the administration does not support specific bills to achieve these goals at the present time, but the report could enhance the momentum for current efforts.
Senate Agriculture Committee Chair Debbie Stabeno, of Michigan, has authored a bill to give the CFTC more power over non-security crypto markets.
The CFTC currently has authority over derivatives and futures, but not the actual spot markets for bitcoin and ether, the two digital assets that are not currently treated as securities.
CFTC Chairman Rustin Benham testified in favor of the legislation, which has yet to receive a committee vote, although Gensler told Congress that having so many regulators focused on cryptocurrencies could undermine oversight efforts.
For his part, House Financial Services Committee Chairman Maxine Waters, MD, California, and Republican Supreme Committee member Patrick McHenry, R-North Carolina, worked on a comprehensive stable bill, including a recent debate draft, although it He doesn't think they've reached an agreement yet.
And the chances of passing the law before the end of this current Congress seem slim, if Republicans control both the House and the Senate, polls indicate that they would prefer to win the House, while the Senate remains frustrated, McHenry may prefer to wait until the next Congress to finish negotiations since chairing the committee that Come with the heart of the house will give him more leverage. He also recently said that any legislation on the subject would have multiple authors from both parties, given the fact that control of the government would remain divided even if Republicans took over both houses of Congress.
The report also called on regulators to be more proactive in enforcing existing laws and directly overseeing crypto-related businesses and activities, especially when they intersect with the traditional financial system. This includes bank regulators using their existing authority to supervise and vet digital asset firms that partner with banks or receive state or federal bank charters.