U.S. Regulators Want More Direct Oversight Of Crypto Exchanges And Regulation Of Stablecoins

According to its most recent report on digital assets, a group of top U.S. regulators wants Congress to approve legislation to allow for more direct monitoring of crypto exchanges and complete regulation of stablecoins.

The Financial Stability Oversight Council also suggested that Congress approve legislation to boost the openness of digital asset projects to other regulatory bodies, allowing regulators from many jurisdictions to better coordinate and understand crypto markets and enterprises.

The report cites three shortcomings in regulatory monitoring of digital assets like spot markets for non-security cryptocurrencies, which now include Bitcoin and Ethereum. Due to the intricacy of crypto enterprises and digital assets, which might fall under several regulatory jurisdictions, “Regulatory arbitrage” is used.

Vertical integration of trading platforms that provide ordinary investors with greater direct access to markets, which the council says may have “Financial stability and investor protection implications” owing to other actions by those platforms, such as automatic asset disposal.

And the council unanimously approved the report. 

The report also urges authorities to be more proactive in implementing existing regulations and actively regulating cryptocurrency-related enterprises and activities, particularly where they cross with the traditional financial system.

Bank regulators can use their current jurisdiction to monitor and investigate digital asset enterprises that cooperate with banks or get state or federal bank charters.

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