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When US Federal Reserve Chairman Jerome Powell said he had no intention of banning cryptocurrencies during a testimony in Congress just days after China stepped up its crackdown by banning all related transactions, many were in the area delighted, but not surprised, of digital assets.
“It’s hard for me to believe that given the role that cryptocurrencies play in the lives of so many citizens, the US regulators would decide that this is the best course of action,” Bobby Zagotta, US CEO of Bitstamp, told Insider. “I think that would be incredibly disruptive and would really put the US and the economy in a compromised position.”
A ban would also drive technological and financial innovations from the US to other countries, according to Charlie Silver, CEO of the crypto-oriented online advertising company Permission.io.
Instead, crypto gamers want to see two things: stakeholder engagement and regulatory clarity.
“The US is the financial center of the world – the flow of capital is here,” Silver told Insider. “I’ve always believed that the US will regulate crypto, but on a slight note.”
Regulatory agencies, including the Securities and Exchange Commission, have been looking into overseeing the room. SEC chief Gary Gensler didn’t shy away from criticizing digital assets, saying earlier this month that platforms have gotten too big, stablecoins are equivalent to poker chips, and crypto is not a viable long-term form of private money.
But none of these views are political guidelines, and his comments only provide clues as to the direction the agency could take in regulating crypto, leaving the market puzzled as to what they might need to do to comply with future rules.
In terms of engagement, Zagotta hopes US regulators would take a “constructive partnership-based approach” with stakeholders coming in and discussing with regulators what guidelines should be established rather than “regulation through enforcement”. one in which decades of regulations are retrofitted to meet current trends.
“We believe that there have to be some rules for really widespread acceptance,” Zagotta told Insider. “There is kind of an anarchist who leans towards some of the crypto gamblers who they believe no rules apply in any jurisdiction. That attitude will slow down adoption.”
Some have already drawn the wrath of the SEC. Coinbase got into a public dispute with the regulator over its Lend crypto loan program, which would have allowed customers to earn 4% interest on their crypto holdings. The SEC said it would sue the crypto exchange if it launches the product. Days later, Coinbase discontinued Lend.
When it comes to clarity, many just say they want some direction of what is addressed first. Possible areas of focus for regulators are accredited fundraising, insider trading and customer verification, or know-your-customer (KYC) processes, added Silver.
If authorities really want to curb the industry, they could focus on more burdensome tax regulations first, said Dean Steinbeck, general counsel and COO of blockchain firm Horizen Labs. This would mean closing a beneficial tax loophole and treating crypto more like stocks. Congress is now considering this.
Still, there are some concerns about what regulators will eventually bring out.
“I don’t expect the US to have a well-thought-out policy,” Steinbeck told Insider. “Instead, I would expect an arbitrary series of incomprehensible laws to be passed that have no clear direction and are impossible to enforce.”
Earlier this week, Gensler warned that cryptocurrency investors “are likely to be hurt” if the digital asset space doesn’t offer the same level of fraud and manipulation protection as bank deposits and insurance.
source https://www.bisayanews.com/2021/10/03/powell-said-the-fed-has-no-plans-to-ban-crypto-here-is-what-experts-say-may-lie-ahead-for-crypto-regulation-as-authorities-tighten-their-grip-currency-news-financial-and-business-news/
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