Investing.com – Cryptocurrencies like , and are growing in popularity, but in many parts of the world there are no clear regulations.
Former New York Fed Chairman Bill Dudley recently told Bloomberg that the continued regulatory vacuum will ultimately lead to the need for stronger action.
For him, there is no question of a total ban, because besides some sub-sectors that urgently need to be regulated, blockchain technology also has advantages, as he said:
“The system could enable better identity management and more complete privacy. Technology can help keep track of goods sold internationally – and verify ownership. Payments could be vastly improved by making them accessible 24 hours a day to more people and at lower cost, especially for the frequent small transactions of migrant workers”.
From Dudley’s perspective, the executive order put in place by US President Joe Biden to regulate the crypto industry is an important first step. But he deplores at the same time the absence of a mechanism guaranteeing that measures are really taken. In the worst case, this could mean that the unrestrained growth of the sector has significant repercussions on the surrounding real economy.
It’s important that authorities don’t get bogged down in the details, as Dudley explained:
“It makes sense to take a step-by-step approach, focusing instead on the objectives, for example the fight against money laundering and the protection of consumers and investors. Market participants must then find their own how best to achieve these goals in practice”.
If this is not done as soon as possible, there will inevitably be consequences that we will all have to bear:
“The longer authorities wait, the greater the risks to consumers, markets and the economy – and the more likely it is that significant losses from cyber theft or a crypto-asset market crash will force hostile intervention on innovation, so it’s in everyone’s interest that the process starts now.”
By Marco Oehrl