In a recent Bank of International Settlements Innovation Summit program, Federal Reserve chairman Jerome Powell wanted new laws introduced for the entire crypto market.
There is no doubt that the crypto market and related technologies can have a positive impact. However, it still requires appropriate legislation.
For example, decentralized finance and distributed technology have the potential to increase the efficiency of payment systems, thus creating competition in the industry.
But despite the benefits that come with the latest products, there are still risks that need to be controlled:
“We don't know how some digital products will change in the face of market pressures which can cause great uncertainty. We also don't know to what extent the pressure in the crypto market is contagious in the traditional market. ”
The new law may also involve stablecoins.
Central bank digital currency (CBDC) digital dollar?
Although the United States (US) has shown interest in launching the CBDC, the Fed has in fact yet to make a clear decision despite an executive order from Joe Biden there emphasizing the issue of digital assets.
Previously, Powell had stressed that international cooperation should be highlighted on issues involving crypto and CBDC.
For now, stablecoins are still seen as a threat to national currencies and most governments around the world want to implement proper supervision.
According to Powell, at a minimum, these four factors should be the focus in the decision to roll out the digital dollar: consumer privacy, identity verification, intermediation, and accessibility.
Apparently, there is still a long way to go to achieve the concept that wants to be emphasized and this means that supervision should be a priority.
