This week, the US government released a report on cryptos. The paper highlights their potential to negatively affect the stability of traditional financial infrastructure. It has been widely commented on by players in traditional finance and those in new financial technologies. Some saw it as a realistic representation of the current situation. The others, meanwhile, see it as an alarmist document. However, each has brought solutions for the success of the regulation. What is Jay Cla0yton’s view on the matter?
Stablecoins first, the rest later!
In interview which he granted to CNBC, a former head of the United States Securities and Exchange Commission (SEC) gave his views on the debate around digital assets. Jay Clayton said crypto regulation should start with stablecoins. Given their prominence, does he think, stablecoins might be the industry’s easiest product to get to grips with. Thus, their review and regulation could be easier in the overall effort to regulate the sector.
“When I talk about the challenge at hand, I mean the rapid introduction of this technology into our traditional financial system. I actually think a good first step would be regulation around stablecoins (…) We have things called stablecoins today that are anything but unstable coins,” he explained. He then added: “If you’re going to have a digital asset that’s really pegged to the US dollar, you need to have regulations in place around that. It’s very prescriptive as to what isn’t a title and what is really stable. I think that would be a good first step.”.
In view of the new government report on the danger of cryptos, the former leader specifies that initially framing stablecoins would reduce the risks of exposure of the American economy.
Stablecoins are cryptos whose value is pegged to a stable safe haven, such as gold or the dollar. For Jay Clayton, their stable nature makes them easier assets to manage than others. He calls on the competent authorities to look at this side first. This, to protect the American economy from the dangers mentioned in a recent report governmental.
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