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The crypto market’s recent performance has left Washington showing that it still has a lot to learn. As most cryptocurrencies continue trading sideways after massive losses, bank regulators testified for hours on end at Capitol Hill today. This session saw lawmakers ask numerous questions about the crypto industry, hoping to find a feasible method to regulate it.
While the US government is keen on regulating the nascent sector, the financial watchdogs present in the proceedings said it’s too early to say if the sector can indeed be regulated. According to Randal Quarles, the Federal Reserve’s Vice Chairman of Supervision, the agency is still studying various approaches that it can use to address the issue of crypto regulation.
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Despite Representative Al Green pushing Quarles to suggest ideas on how Congress can regulate the crypto market, no solutions came forth. Instead, Quarles defended federal agencies, saying they still need time to find the best regulatory approach before they can proceed to create a framework that governs the rapidly growing crypto industry.
Other watchdogs shared the Federal Reserve’s sentiments, noting that they are still in the initial stages of examining how to policy the crypto space. Michael Hsu, the Acting Comptroller of the Currency, testified alongside Quarles, saying his office and other relevant agencies have been discussing the possibility of creating an interagency task force to govern tokens.
Varying sentiments on crypto regulation
This news comes as lawmakers try to find a unified stance on crypto. While some believe regulation needs to be imminent, others have a laid-back approach. For instance, Sherrod Brown, the Chairman of the Senate Banking Committee, said the wild price swings of cryptocurrencies are a cause for alarm. According to him, the volatility means FinTech firms and other companies that operate outside the regulatory system pose a significant danger.
Senator Mark Warner, who is also the Chairman of the Intelligence Committee, said he acknowledges the blockchain and cryptocurrencies have intrinsic value. While he said the burgeoning industries have been begging for some oversight for quite a while, Warner believes that figuring out how the market will work and how it should be regulated will take time.
On the other hand, Senator Pat Toomey believes cryptocurrencies do not need regulation at the moment. According to him, crypto regulation should not be based on the volatility of the asset class. He also believes that cryptos, none of which he considers currencies, should be regulated only when they become widely used as mediums of exchange.