The Biden Administration Urges Congress to Go Ahead with New Crypto Rules

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Times are changing fast for crypto around the world, including the USA. New crypto laws were already in the works, and the Biden administration would like to speed things up. Just a few days ago, members of president Joe Biden’s council have called on Congress to pass new laws sooner in order to clarify how cryptocurrencies are regulated and to cover digital assets such as Bitcoin.

Biden’s administration wants this done as soon as possible as further delays are putting investors at risk. The report by the US Financial Stability Oversight Council, which also includes the Treasury, came on Monday. It is urging politicians to come to an agreement in regards to cryptocurrencies which will finally settle on how Bitcoin and other coins are regulated in the USA.

New Laws Coming Soon?

The past year has been tumultuous for cryptocurrencies. Bitcoin’s volatility and the demise of several coins have been a big problem for investors, bankrupting many companies. In times like these, it remained unclear who should regulate Bitcoin and other assets, and there have been numerous propositions in the past. US politicians and the Treasury have been talking for the past months on agreeing who the watchdog should be and how to regulate cryptocurrencies and protect the interest of investors. It’s not just the USA – the EU is moving closer to a similar regulation package that will determine how cryptos are regulated in Europe.

There was recently a Congress debate on how to cover the growing stablecoin industry. This would allow the government to introduce tax rules for crypto brokers. The Congress is worried about another terraUSD collapse, which can make many investors lose a lot of money and cause companies to go bankrupt. That’s precisely why the Congress wants to pass new laws and regulations, although to be honest, everyone thinks it’s still months away.

SEC has pushed for jurisdiction over the industry, saying that most cryptocurrencies and the platforms they trade on should be regulated by the securities and exchange watchdog. And it might have a point as by current classifications, most coins are securities under US law.

Protecting Against Run Risk

The Treasury report warned Congress that not having even basic risk controls means that protection against run risk is virtually non-existent. That’s a big problem for investors along with the prices. The prices seem to be driven by speculation rather than being grounded in financial use cases. The biggest problem is the volatility which has already run Bitcoin and other cryptos in the ground.

The FSOC hopes for inter-agency co-operation to close all existing loopholes. By doing that, it will allow many businesses to find the most favorable regulation for their needs. That’s exactly why the Biden administration is pushing for changes. While Congress is citing months before any voting, the president wants this done as soon as possible.

Of course, it could have major implications for Bitcoin’s price, which we’ve seen move on major regulation changes all over the world. These new laws also represent a great way to battle crypto crime, something which has plagued the industry in the past.

October 5, 2022: • No Comments

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