[2021-07-15] Fed Chairman Says U.S. Might Need More Crypto Regulation. Here’s Wh

[Woodie]

Fed Chairman Says U.S. Might Need More Crypto Regulation. Here’s What That Means for Investors

The U.S. government this week laid more groundwork for potential future cryptocurrency regulation.

Federal Reserve Chairman Jerome Powell spoke Wednesday, July 14 about the Fed’s interest in regulating stablecoins and the potential for a central bank digital currency (CBDC), while testifying before the U.S. House Committee on Financial Services.

Stablecoins (Tether and USD Coin, for example) are a category of cryptocurrencies that peg their value to an existing fiat currency, like the U.S. dollar. That helps stabilize their value, so they’re better suited for digital payments — unlike more volatile digital assets like Bitcoin. Ideally, these coins are underwritten by a reserve of the currency they’re tied to, but today there’s little official regulation enforcing that.

Powell compared them to money market funds or bank deposits, which have a strong regulatory framework in the United States. “That doesn’t exist for stablecoins,” he said. “And if they’re going to be a significant part of the payments universe — which we don’t think crypto assets will be, but stablecoins might be —  then we need an appropriate regulatory framework, which frankly we don’t have.”
What Does This Mean for Crypto Investors?
Experts we’ve spoken to largely agree that long-term crypto investors should stick with well-known cryptocurrencies like Bitcoin and Ethereum. Unless you’re doing more active trading — and are comfortable with the risks of buying lesser-known coins — the two most popular currencies are the best options for most people.

Regulation like what Powell is talking about is more likely to impact stablecoins and other smaller altcoins, experts say. “They have different use cases,” says Mike Uehlein, founder and financial planner at WealthU Advisors, referring to Bitcoin versus stablecoins.

Read more https://time.com/nextadvisor/investing/cryptocurrency/more-federal-regulation-coming-for-crypto/

[SFR10]

IMO, it doesn't make sense to regulate some of the cryptocurrencies while also trying to introduce their own CBDC, which essentially replaces those stablecoins.
I agree with most of the things that "Uehlein" said in that article ^{[especially the part that this won't have much impact on BTCitcoin]} but I slightly disagree with regulations potentially being the reason behind the elimination of most smaller cryptocurrencies; we already have a lot of those due to "various reason" other than being regulated.

[buwaytress]

Might need? I think once US started down that path, there was always going to be little space to turn back. But that's not necessarily a bad thing, given that there are many more options today in the US for the retail consumer to get their hands on and hold Bitcoin without wondering if it's legal or not (it's regulated so it is).

Not that I'd want to be a US citizen holding any kind of crypto, but it might even encourage competition between states there when attracting crypto business (it already does).

[NeuroticFish]

the Fed’s interest in regulating stablecoins and the potential for a central bank digital currency (CBDC), while testifying before the U.S. House Committee on Financial Services.

They should have been regulating them better from start, in a way to clearly prove they have the backing they claim in each and every moment.
Now... it's different. As said, they want to smoother the path for CBDCs and get "the competition" basically out of business by requesting this and that.

[mindrust]

They are all bark no bite. How many years has it been now since Bitcoin appeared?? 12? If they regulate bitcoin, it will be bitcoin's favor because the gov will recognize bitcoin as a legit asset. Right now bitcoin is semi-legit.

What difference would that regulation make anyway? The US people can already purchase coins via Coinbase, filing their tax returns... By "regulations", do they mean they are going to jail the price manipulators like Elon Musk if they talk silly?

If that's what they mean, then it is a good thing.

[bbc.reporter]

The U.S. SEC and the Federal Reserve will have a meeting tomorrow with the top of their agenda to be cryptocoins, stablecoins and the cryptospace.

It might be nothing but another set of warnings, however, it might be something more concerning after learning from China’s ban.

[hv_]

The U.S. SEC and the Federal Reserve will have a meeting tomorrow with the top of their agenda to be cryptocoins, stablecoins and the cryptospace.

It might be nothing but another set of warnings, however, it might be something more concerning after learning from China’s ban.

The 'top' what?

Is Satoshi on as well?

 

[bbc.reporter]

@hv_. Are you using Google translate? It appears you did not understand the sentence.

In any case, the good and honorable people in congress appears to have added a quick provision in America’s must pass infrastructure bill.

This is only a preview of a long thread.



A new provision has been added that expands the Tax Code's definition of "broker" to capture nearly everyone in crypto, including non-custodial actors like miners, forcing them all to KYC users.

The bill expands the definition of a "broker" to include "any person who (for consideration) is responsible for and regularly provides any service effectuating transfers of digital assets."

Earlier drafts said "even if non-custodial" & explicitly included DEX & P2P markets.

This definition is so broad, it could apply to nearly every economic actor in the US crypto industry, if read literally.

That includes PoW miners & PoS validators, since "providing a service to effectuate transfers of digital assets for consideration" seems to fit both.

Source https://mobile.twitter.com/jchervinsky/status/1421150344051048451