UBS, the largest bank in Switzerland, believes that it will take the United States Congress a long time to introduce cryptocurrency legislation in the country, even though there is mounting interest in investments in these digital assets. Furthermore, regulators are also urging Congress to come up with proper legislation for regulating the industry. On Friday, the bank published its views regarding the regulation of cryptocurrencies in the US, after a lengthy hearing was conducted by the House of Financial Services Committee on the regulation of stablecoins and cryptocurrencies in the previous week.
According to the US Office of Public Policy of the Swiss bank, the hearing saw a senior Treasury official highlight recommendations that had been made in a stablecoin report, which was issued by the Department of the Treasury, along with some other regulators. The UBS team stated that in order to address the concerns regarding financial stability and for filling in the regulatory gaps, the regulators want the US Congress to come up with legislation that can regulate the stablecoin issuers in the same way as banks. The team also noted that some lawmakers have pushed back at this proposal and are not happy with it.
Furthermore, the central bank digital currency (CBDC) report that had been published by the Federal Reserve had also made it clear that it would appreciate some direction from Congress before it decides to pursue the development of a digital dollar. However, the largest bank in Switzerland believes that lawmakers will take some time for processing the complexities of these issues and then come up with potentially divergent approaches regarding the regulation of these digital assets. The UBS team further added that it was likely for regulators to have to wait a long time to see some Congressional action.
Meanwhile, it said that they would have to grapple with the problems by using the imperfect and limited authorities they already possess. Regardless, the bank highlighted that there was growing interest in cryptocurrencies, both in the general public as well as Congress itself. In addition, there have also been reports that the Biden administration may come up with an executive order in the near future for weighing in on cryptocurrency regulation. Last year in August, US Senator Ted Cruz had criticized his colleagues in Congress for attempting to regulate cryptocurrencies without having a clear understanding of these virtual currencies.
The Texas senator said that it was not wise to regulate something that is not clearly understood. He said that they should first take out the time to try and understand cryptocurrencies. He stated that they need to conduct some hearings and should also give some thought to the consequences. He went on to say that they should not destroy the livelihoods and lives of people because of their ignorance. Meanwhile, the two US federal agencies, which are the Commodity Futures Trading Commission (CFTC) and the Securities and Exchange Commission (SEC), have also been collaborating in order to ensure as much investor protection as possible in the crypto space.