(Bloomberg) — The Federal Reserve’s top banking regulator sees a warning for the broader financial system in the recent crypto-market turmoil.
(Bloomberg) — The Federal Reserve’s top banking regulator sees a warning for the broader financial system in the recent crypto-market turmoil.
Fed Vice Chair for Supervision Michael Barr says that more regulation is needed for digital assets and that crypto firms should face rules that resemble those that apply to Wall Street. The comments, which he plans to deliver on Tuesday before the US Senate Banking Committee, follow a chaotic week for crypto as the industry reels from the collapse of Sam Bankman-Fried’s FTX.
“Recent events remind us of the potential for systemic risk if interlinkages develop between the crypto system that exists today and the traditional financial system,” Barr said in remarks posted on the Fed’s website on Monday. “Crypto-asset-related activity, requires effective oversight,” he said without mentioning any firms by name.
Barr added that the Fed, the Office of the Comptroller of the Currency and the Federal Deposit Insurance Corp. are working together “to assess the risks and opportunities posed by a range of crypto-asset-related activities.” The heads of those agencies are also scheduled to testify at the Tuesday hearing.
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