UBS Group’s Chairman says “governments will not tolerate” crypto becoming really big as the Joint Economic Committee chairman urges Congress to pass legislation to regulate it.
Representative Don Beyer, who held a hearing on “demystifying crypto,” said Congress must pass legislation to regulate crypto assets before their rapid growth could pose dangers to investors and the financial system.
He also acknowledged that most lawmakers have a steep learning curve when it comes to crypto but said it’s vital they provide guidelines for regulators.
The Joint Economic Committee chairman said he’d be “thrilled” if a bill could be passed sometime next year.
“We are trying to get ahead of this,” Beyer said.
In other news, UBS Group AG’s Chairman Axel Weber said he is “skeptical” of crypto.
“I love the technology. I think the idea of having instantaneous transactions between a large number of people — fantastic,” said Weber at the Bloomberg New Economy Forum in Singapore.
However, the concept of anonymous payments “will not survive,” he said. The former central banker drew comparisons to governments phasing out big-denomination bank notes to avoid unidentifiable, large transactions.
“Governments will not tolerate this to become really big,” Weber said.
Stablecoins Needn’t Follow Same Rules As Banks
Meanwhile, Federal Reserve Board Governor Christopher Waller commented on stablecoins, calling for a stronger and supervisory framework but said they don’t need to be subject to the same rules as banks.
“The regulatory and supervisory framework for payment stablecoins should address the specific risks that these arrangements pose — directly, fully, and narrowly.”
“But it does not necessarily mean imposing the full banking rulebook, which is geared in part toward lending activities, not payments.”
Speaking at the virtual conference organized by the Cleveland Fed, Waller said he disagrees with the recommendations made by the President’s Working Group on Financial Markets earlier this month that called for stablecoin issuers’ regulation like banks.
The policymaker further said he is also okay with banks being able to issue stablecoins besides bank deposits but does not agree with the idea of only banks being allowed to issue stablecoins.
On the topic of a central bank digital currency (CBDC), the Fed official said that he is still skeptical of it because there is already “real and rapid innovation” happening in the payments space, so the government shouldn’t create a CBDC to bring down the cost of payments.
RBA Head Of Payments Policy Using Crypto
On Thursday, during an online conference, the Reserve Bank of Australia’s head of payments policy, Tony Richards, warned that the significant gains in the crypto market could be erased as trends change and regulatory and monetary developments happen.
He added that other factors that put their valuation under pressure include the lower influence of fads, association with financial crimes, and greater concern about the industry’s energy usage.
But he doesn’t see crypto as a threat to the Australian dollar or the country’s monetary sovereignty because they aren’t widely used.
“I can’t see shops posting their prices in cryptocurrencies or companies doing their annual reports in cryptocurrencies or lots of people wanting to get paid in cryptocurrencies,” he told the Australian Corporate Treasury Association.
And while a wide range of investors like hedge funds or households believe there is a significant role for crypto, “much of the official sector globally remains skeptical of developments in the cryptocurrency market,” he said.
Moreover, “it is unclear how widely held they are,” Richards said, noting some surveys claim 20% of the Australian population hold cryptos.
Richards also confessed that he has owned a crypto wallet since 2014, saying, “After all, part of my job is to try to understand new payment instruments and technologies.” The central bank official is retiring at the end of the year.