Will war be the catalyst for crypto regulation?
The news that Russians are looking to crypto as a means around strict sanctions may prove to be a catalyst for a wave of regulations targeting the sector. The United States’ Fed Chair Pro Tempore, Jerome Powell, is now calling for rapid action.
“[The Ukraine-Russia conflict] underscored the need for Congressional action on digital finance including cryptocurrencies,” Powell said, as quoted by Coindesk. “We have this burgeoning industry which has many parts to it, and there isn’t in place the kind of regulatory framework that needs to be there.”
Earlier this week, leading crypto exchange, Binance, stood firm that it would not restrict Russian access to the platform. It would sanction individuals as required, it announced. However, the company argued that the decentralised nature of crypto made the logistics of such nationwide sanctions impractical.
Powell raised concerns about Russia leveraging crypto to bypass sanctions. Additionally, he expressed a worry that malicious actors – including terrorists – would be drawn to an unregulated crypto environment.
In other news, Powell was asked about a central bank digital currency (CBDC), which has become a subject of interest. For now, his position is that the cost-benefit of doing so has not been made clear.