{"id":391858,"date":"2021-11-16T19:34:03","date_gmt":"2021-11-16T19:34:03","guid":{"rendered":"http:\/\/radiofree.asia\/?guid=c79e0228ce26a23c133b2f87e4f7be73"},"modified":"2021-11-16T19:34:03","modified_gmt":"2021-11-16T19:34:03","slug":"biden-administration-is-playing-with-fire-by-failing-to-regulate-cryptocurrency","status":"publish","type":"post","link":"https:\/\/radiofree.asia\/2021\/11\/16\/biden-administration-is-playing-with-fire-by-failing-to-regulate-cryptocurrency\/","title":{"rendered":"Biden Administration Is Playing With Fire by Failing to Regulate Cryptocurrency"},"content":{"rendered":"\"A<\/a>

The Biden administration declined to establish more stringent rules for part of the mushrooming cryptocurrency industry despite evidence that it could be at the heart of a massive scam which threatens broader economic well-being.<\/p>\n

The President’s Working Group on Financial Markets, a multiagency initiative tasked with attempting to ensure market orderliness, said in a report released on November 1<\/a> that so-called stablecoins should be regulated like banks, but that it would be up to Congress to establish such a regulatory framework.<\/p>\n

Cryptocurrencies consist of encrypted public records that demonstrate an entity’s ownership over the record, and transactions that the record facilitates. Advocates claim that cryptocurrencies enhance privacy and revolutionize payment processing, but their use-value has been widely questioned<\/a> by critics who view the market as a highly speculative bubble waiting to burst<\/a>. The computing power that can be used to obtain, or \u201cmine,\u201d certain cryptocurrencies also increasingly contributes to global carbon emissions, as those who question the benefit of the industry often point out. Research published by University of Cambridge found that<\/a> Bitcoin mining uses more energy than the population of Argentina.<\/p>\n

While the prices of most cryptocurrencies such as Bitcoin fluctuate wildly, stablecoins are pegged to the value of another asset, like the U.S. dollar. They are primarily used to borrow and lend money on cryptocurrency financial markets and to bet on the prices of various tokens, like Bitcoin.<\/p>\n

Stablecoins are attractive for those interested in speculating on cryptocurrency because it’s easier to trade one type of token for another using stablecoins than it is to convert the token into fiat currency, and then into another type of token. The top stock market regulator, Securities and Exchange Commission (SEC) chair Gary Gensler, has called stablecoins<\/a> \u201cpoker chips at the casino.\u201d<\/p>\n

Industry trade groups hailed the Biden administration’s decision, with some noting that Congress is very unlikely to act on the recommendations anytime soon. Meanwhile, public interest groups decried the move, saying that regulators are playing with fire by sitting on their hands, and that the government already has the authority it needs to rein in abuses.<\/p>\n

\u201cUnless federal regulators take prompt and effective action to deal with stablecoins, there is a grave danger that the $120 billion dollar stablecoin market will pose severe operational and systemic threats to our financial system,\u201d Americans for Financial Reform (AFR) said in an open letter<\/a> to Treasury Secretary Janet Yellen, which was published on October 19 in anticipation of the report.<\/p>\n

Todd Phillips, director of financial regulatory and corporate governance for the Center for American Progress, said he was \u201cvery disappointed by the political aspect of this decision.\u201d<\/p>\n