Crypto Assets Growing Popularity Might Bring Associated Regulatory Risks.

Crypto Assets Growing Popularity Might Bring Associated Regulatory Risks.

2021-06-01 | Big Bob

Crypto Assets Growing Popularity Might Bring Associated Regulatory Risks.

Crypto-currencies' persistent growth and ever more mainstream adoption are keeping international monetary authorities on their toes. Within fresh comments earlier this week, Stefan Ingves, the governor of Riksbank — Sweden’s central bank - revealed that digital assets’ rising popularity raises the stakes for regulators, central bankers, and lawmakers globally:
“When something gets large enough, things like consumer interests and money laundering play. So there’s good reason to believe that [regulation] will happen.”
Devising regulatory frameworks for an asset that was initially designed to bypass the very architecture and rules of traditional finance is not an easy task. Within the U.S.Federal reserve vice president of Supervision Randal Quarles raised his concerns that present regulatory provisions for crypto are inadequate, indicating that the Fed is within the process of looking into how best to tackle the difficulty. Quarles’ remarks were made amid every week of untamed volatility within the cryptocurrency markets, with Bitcoin [BTC] temporarily shedding a steep $15k in value in one fell swoop. The European Union has, meanwhile, pledged to “put in situ a comprehensive framework permitting the uptake of DLT and crypto-assets within the financial sector” by 2024 -one which will, equally, tackle the risks involved in these technologies’ mainstream uptake. In Sweden, Åsa Lindhagen, the minister for financial markets, outlined that the govt is already engaged in strengthening regulatory standards for cryptocurrency exchanges. Various crypto regulatory approaches remain, she added, a “work ongoing at the international level.” Ingves has himself remarked that cryptocurrency regulations “will probably come at different times in several areas.” Yet when it involves the “very important issue” of cash laundering, Lindhagen pointed to the necessity for cross-border coordination between regulators globally. As regulators mull the way to approach the phenomenon of decentralized crypto assets, the Swedish central bank is meanwhile making headway with its development of a CBDC, the e-krona. Its proof-of-concept uses Corda, a DLT solution from R3. Ingves has previously indicated the currency might be operational within 5 years.

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