Biden administration is targeting the burgeoning cryptocurrency industry, and it seeks to impose federal control over digital assets.
When Federal Reserve Chairman Jerome Powell said last week that he was not seeking a ban on cryptocurrencies, investors were relieved, and the price of Bitcoin rose more than 10% to its highest level in nearly two weeks.
But behind the scenes, there are growing concerns that, after allowing the sector to grow from a shadowy venture into an industry worth more than $2 trillion in nearly 10 years, regulators in Washington are now preparing to impose a series of rules aimed at shackled cryptocurrencies.
Regulators have warned the industry, and on the same day, Powell indicated that he wants to impose federal standards on stablecoins, a type of digital asset that has grown exponentially in recent months and usually maintains a stable price by pegging itself in a national currency.
His comments came as details began to leak out about a major report by the Biden administration, which is expected to recommend to regulators the development of bank-like rules for stablecoins.
Just last week, Securities and Exchange Commission Chairman Gary Gensler likened stablecoins to casino poker chips, adding that he didn’t think cryptocurrency had the long-term viability. Acting Currency Observer Michael Hsu said the crypto craze is like a foolish gold rush similar to what preceded the 2008 scientific financial crisis.