Federal Reserve Vice Chair Lael Brainard said the cryptocurrency market bears similar risks to traditional finance, but will need new regulations for situations not covered by existing laws.
“We have seen that the crypto financial system has all the same risks that we’re very familiar with from traditional finance,” she said in a speech at the Clearing House and Bank Policy Institute 2022 annual conference on Wednesday. But given the unique characteristics of crypto, there's a need for “creating clear regulatory guardrails.”
Brainard is leading the central bank’s exploration of a digital U.S. dollar, and her role as the No. 2 person at the Fed makes her opinions on crypto quite significant. Brainard’s latest remarks echoed her previous statements that the sector needs to meet the same safety standard as traditional finance in order to prevent it from becoming a threat to the broader financial system.
The Fed vice chair also reiterated the risk of stablecoins in her speech. She...
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