Top Fed Exec. Michael Barr Hints at Tougher Crypto Regulation
Top Fed Exec. Michael Barr Hints at Tougher Crypto Regulation
- Fed’s Michael Barr said that US central banks are watching financial systems closely.
- Barr also revealed that the Fed will focus strongly on liquidity, credit, and interest-rate risks.
- The executive noted that the US economy has weakened due to tough financial conditions and increased uncertainty.
On Monday, Federal Reserve’s top executive, Michael Barr, claimed that tougher regulations for cryptocurrencies are likely to happen soon. As per reports, Barr revealed that the US central bank is also keeping a close eye on the financial system in the times of a struggling economy.
Barr wrote in his delivery for the Senate Banking Committee that the Federal Reserve will focus strongly on liquidity, credit, and interest-rate risks as “supervised institutions manage the changing financial situations”.
In his testimonial, he noted that the economic perspective of the US has weakened due to tighter financial conditions and increased uncertainty.
Barr stated:
A weaker economy could put stress on households and businesses and, thus, on the banking system as a whole.
Amid the high inflation and the unending Russia’s war in Ukraine, not just US but global economies too are feeling the heat evermore.
In his testimonial, Barr set out the tone for regulations including banks and the crypto industry. Barr also reminded investors that the Fed wants to keep supporting innovation but absence of regulations can put consumers, businesses and economy in danger.
Citing recent crypto mayhem, he said that these events have brought into light the crypto associated risk to investors and consumers in absence of regulations.The Fed had recently hiked the benchmark rate by 0.75 basis point and turned it from 3.75% to 4% as a measure to combat inflation. However, the hike had a rather volte face effect on crypto with BTC and ETH turning volatile.
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