The Financial Stability Oversight Council is worried about the impact of cryptocurrency on the U.S. financial system. It published a new report outlining its concerns.
"The scale of crypto-asset activities has increased significantly in recent years. Although interconnections with the traditional financial system are currently relatively limited, they could potentially increase rapidly. Participants in the crypto-asset ecosystem and the traditional financial system have explored or created a variety of interconnections. Notable sources of potential interconnections include traditional assets held as part of stablecoin activities. Cryptoasset trading platforms may also have the potential for greater interconnections by providing a wide variety of services, including leveraged trading and asset custody, to a range of retail investors and traditional financial institutions. Consumers can also increasingly access cryptoasset activities, including through certain traditional money services businesses," the report says.
ROSS MAC: Let me know what you think…Do unregulated cryptocurrencies pose a risk to the overall US financial system? Well that's what the Treasury Department thinks, following a new report. Janet Yellen followed up on the report, saying that she thinks that the report highlights the necessity of appropriate regulation. Stablecoins, in particular, are concerning following the collapse of UST earlier this summer. But with the proper regulation, even outspoken crypto skeptic Jamie Dimon believes that stablecoins could prove useful. The Treasury also identified lending and borrowing on the industry’s trading platforms as an “important emerging vulnerability.” While Yellen believes that the report could be used to build a strong foundation for regulation, only time will tell whether or not the proper regulation can prevent another UST collapse. What do you think?
It's ya boy Ross Mac and that was the Crypto Minute on TheStreet.
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