Financial Times: U.S. regulators plan to play a bigger role in the cryptocurrency market

This article is from the Financial Times and translated by Chain Catcher.

U.S. financial authorities are preparing to take a more active role in the $1.5 trillion regulatory landscape, as concerns grow that the lack of proper oversight in the cryptocurrency market could harm users and investors.
This new initiative reflects a break from the previous administration, which, in some cases, encouraged the use of cryptocurrencies within the monetary system. However, it may take some time to take effect, as U.S. regulators struggle to determine who has the legitimate authority to oversee the tumultuous market.
In an interview with the Financial Times, Acting Comptroller of the Currency Michael Hsu, who just took office this month, expressed his hope that U.S. officials would work together to set "regulatory boundaries" for cryptocurrencies.
Hsu stated, "It really depends on the coordination between the agencies." "I am interested in coordinating more of these things with my colleagues."
The cryptocurrency market has been like a roller coaster over the past 12 months. In February, after Tesla founder Elon Musk mentioned that the company had invested $1.5 billion in cryptocurrency, the value of Bitcoin soared, surpassing $60,000 in April.
However, after Chinese regulators announced a crackdown on the use of digital currencies, its value plummeted, and Musk withdrew the initiative to allow Tesla cars to be purchased with Bitcoin due to environmental concerns. Other cryptocurrencies are experiencing similar volatility.
This month, a signal of the new regulatory approach in the U.S. appeared with the preliminary formation of a crypto "sprint" team involving three major federal financial regulatory agencies: Hsu's Office of the Comptroller of the Currency, the Federal Reserve, and the Federal Deposit Insurance Corporation.
Hsu mentioned that the team's goal is not to formulate policy but to "offer some ideas for the agencies to consider" as they attempt to respond to the expansion of cryptocurrencies.
SEC Chairman Gary Gensler told a House committee last week that "there are gaps in our current system," indicating that legal provisions may be needed to specify which regulatory agency should oversee cryptocurrency trading.
Gensler noted that his intention is to "provide similar protections for trading platforms for crypto assets as you would have on the New York Stock Exchange or Nasdaq."
Gensler also mentioned that the Treasury's goal is to address "anti-money laundering and prevention of illegal activities" in the crypto market. Treasury Secretary Janet Yellen expressed her concern that Bitcoin "is often used for illicit financing."
As part of Hsu's initial actions at the OCC, he has asked staff to evaluate a resolution from the Trump era that would grant state trust charters to companies providing cryptocurrency custody services.
Although Hsu believes that innovations such as blockchain technology used in cryptocurrencies have no turning back, he stated in his congressional testimony this month that the current enthusiasm for innovation in banking resembles the years leading up to the financial crisis.
The danger is that new technologies and improved technologies will create a "large, less-regulated shadow banking system." He noted that today, fintech and technology platforms have designed payment processing tools with "great potential," but "there are risks."
Hsu told lawmakers, "For me, I can't help but feel a sense of déjà vu."