Daily Management Review

The US authorities to tighten control over crypto-currencies


The US authorities, alarmed by the global rush around bitcoin and other crypto currencies, are preparing to consider new rules. Their introduction will lead to tightening of federal control over this emerging class of assets, reports Reuters.

David McBee
David McBee
US lawmakers are moving to consider new rules for federal supervision of crypto-currencies. The Senate and the House of Representatives are actively studying methods of combating the risks created by crypto-currencies for investors and the financial system.

Even free-market supporters, conservative Republicans, claim the need to regulate crypto-currencies if they threaten the US economy. At the moment, digital assets are located in the so-called "gray" zone of the legal field.

"There is no doubt that there is a need to create a regulatory framework," said Republican Senator Mike Rounds, a member of the Senate Banking Committee. Legislator Carolyn Maloney explained that many people do not understand that "there is nothing to confirm the value of these virtual currencies."

In different situations, crypto-currencies are subject to regulation by various authorities: the Securities and Exchange Commission (SEC), the Commodity Futures Trading Commission (CFTC), the US Treasury, the Federal Reserve or the state authorities.

American legislators are concerned about speculative trading and investments in crypto-currencies. Probably, the Securities and Exchange Commission will carry out the main work on regulation of the Crypto-currency.

Although many legislators agree on the need for more stringent controls, there is as yet no consensus in Congress on how to proceed. Democrat Senator Chris Van Hollen, member of the Senate Banking Committee, explained the complexity of regulating crypto-currencies: "The goal here is to have rules that protect consumers, but do not discourage innovation."

The US government needs to do a lot of preparatory work before regulating bitcoin. While the country's authorities are not ready for this, US Assistant to the President and coordinator of the Cyber Security Department of the White House Rob Joyce said in an interview with CNBC. "We still do not fully understand the pros and cons of this market, which means that it is still far from full-fledged regulation of the market," Joyce explained at a security conference in Munich.

Earlier, the head of the International Monetary Fund (IMF) Christine Lagarde said that the organization was trying to prevent the use of crypto currency for money laundering and terrorist financing, adding that their regulation at the international level is inevitable. Regulation of crypto-currencies will be included in the agenda at the March G20 summit in Buenos Aires. Representatives of France and Germany are expected to propose to impose restrictions on the crypto currency market, but this is still unconfirmed rumours.

Recall that last week the Commission for Trade in Commodity Futures USA (CFTC) held a meeting on crypto currency, blocking technology and their regulation. The CFTC approved the creation of two subcommittees, one of which will deal with digital currencies, while the second will expand the use of blocking technology in the financial space.

According to the representative of CFTC Brian Quintens, the commission should allow investors and consumers to independently decide what products deserve to be on the market. Some participants stressed the need to create new rules to ensure the use of DLT technology in the financial sector.

According to deputy head of the CFTC market control department, an attempt to adapt technology to existing legislation may be useless and too costly.

source: reuters.com