She was saying CQFD During her October 26 address at the International Swaps and Derivatives Association (ISDA) Crypto Forum, CFTC Commissioner Kristi Goldsmith Romero discussed the risks cryptocurrencies can pose to financial stability. solutions for systems Then discussed.
From the birth of Bitcoin to the risks of financial stability
Kristi Goldsmith Romero She started by noting that she did studying cryptocurrency for law students in Georgetown University School of Law and others’University of Virginia School of Law.
So she was naturally interested in cryptocurrency. In fact, her ten-year tenure as a special inspector general for the Troubled Asset Relief Program (TARP) helped her discover bitcoin.
Subsequently, the CFTC commissioner referred to origins Bitcoin (BTC). It will be “the offspring of the 2008 financial crisis and the bailout of the banks.” At the very least, he would have been affected by this event in the least.
In her speech, Kristi Goldsmith Romero uses material from the introductory section to indicate that the federal government should adopt A risk-focused approach. Target? Cryptocurrency regulation.
Terra Codes: Organizers’ Favorite Bad Student Crypt
To prove that cryptocurrencies pose risks to financial stability, “With topics similar to those that appeared in 2008.”Commodity Futures Trading Commission (CFTC) Commissioner Extends Impact of Token Collapse in Ecosystem Tera.
TerraUSD, which was the third largest stablecoin by market cap, has seen its value drop to zero. The Then the consequences were detrimental to other cryptocurrencies like bitcoin. Terra executives have liquidated up to $3.5 billion in BTC.
Kristi Goldsmith Romero continued her presentation, citing other victims of the TerraUSD crash. The list includes financial difficulties resulting from Three equity sharesor digital travel.
In light of these recent events that have affected the sector, infection riskwhich partially caused the 2008 financial crisis, is also related to cryptocurrencies.
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A dangerous (alleged) marriage between cryptocurrency and traditional finance
Kristi Goldsmiths Romero insisted that the risks posed by cryptocurrencies to financial stability will increase and may become “comprehensive.” because of ? The increase in bonding between the cryptocurrency industry and traditional financial actors, which “perform the essential market functions.”
To illustrate this convergence between digital assets and traditional finance, Kristi Goldsmith Romero cited the case of BNY Mellon. The Bank of New York announced the launch of a cryptocurrency custodian service. She also noted that public companies own digital currencies. In doing so, it indirectly exposes its shareholders and creditors.
With regard to this convergence between traditional and new financing, the CFTC Commissioner specific concerns Regarding the investments that retirement and pension funds can make in cryptocurrencies in the future.
Bitcoin regulation: more power and equal treatment
At the end of these demonstrations pointing to the danger that cryptocurrencies pose to financial stability, Kristi Goldsmiths Romero wants Congress to grant Additional Powers of the CFTC.
The CFTC Commissioner stresses the need to implement these regulatory actions as quickly as possible. She says the government should not wait for the risks you mentioned to become systemic before taking action.
Kristi Goldsmith Romero also recommends applying ” Same risk, same regulatory outcome In other words, crypto products that are currently under its jurisdiction should be subject to the same regulatory framework as traditional financial products.
CFTC officials continue to claim Increased powers to be able to regulate cryptocurrencies. Regulation in itself does not harm the development of the sector. In fact, the use of this additional power over cryptocurrencies may raise concerns for companies in this sector. This concern is justified if the CFTC refuses to acknowledge the need for a specific framework for cryptocurrencies, rather than applying the provisions that govern traditional finance to crypto products, without showing evidence of discrimination.
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