The growth of cryptos has been particularly remarkable lately. Indeed, not only are many people joining the ranks of users, but digital assets are also beginning to interest large institutions. However, they continue to pose problems, according to the governor of the Federal Reserve. Michelle Bowman said that activities that relate to digital assets “raise a number of important issues”.
The reason for the lack of rules
According to Michelle Bowman, Governor of the Federal Reserve, despite their growth, cryptos continue to be a concern, especially in the field of banking. She noted that their use must be governed by new regulations.
It was during a session with the Institute of International Finance (IIF) that the Federal Reserve Governor made his stance on cryptos clear. She insisted on the fact that it is not because of a lack of will from the authorities that there is not yet regulation in the sector. According to her, it is rather because of the rapid evolution of technology around cryptos.
“Another area in which regulation and supervision continue to evolve is that of banks engaging in cryptocurrency-related activities, added Ms. Bowman. These activities raise a number of important questions. She later said: “When I think about the evolution of the supervision and regulation of these activities, I wonder if the rules are clear in today’s rapidly changing environment and whether the rules, as they evolve, serve a legitimate prudential purpose”.
The need for a regulatory framework for cryptos
For the Federal Reserve Governor, banks can continue to engage in crypto-related activities. However, they can only do so on one condition. According to her, there absolutely must be a constant dialogue between bankers and regulatory bodies.
“The adoption and use of new technologies can present new supervisory concerns, but the best way to address these concerns and encourage innovation and a dialogue between bankers and supervisors before and during the development and implementation of these technologies, she pointed out.
Furthermore, Ms Bowman pointed out that banks must have a well-defined regulatory framework in order to reduce volatility risk cryptos. Either way, cryptos are now have become essentialand they will not fail to enter the universe of banks.
According to the highest authority of the Federal Reserve, banks can continue to put in place various initiatives with regard to the introduction of cryptos in the finance sector. But for such a merger to be a success, it will absolutely be necessary for a regulatory framework to be well implemented and effective.
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