The U.S. Federal Reserve and the Treasury Department are stepping up the pressure on cryptocurrency, signaling that a crackdown could come after days of volatility in the sector.
US Federal President Jerome Powell said in a rare video post that cryptocurrencies, which have reached a market cap of nearly $ 2 trillion ($ A2.6 trillion), pose risks to both investors. individuals and for the financial system in general.
Mr Powell also noted that the Federal Reserve is studying how and if cryptocurrencies could improve the current US financial system.
He said the Federal Reserve has looked into whether it should create its own cryptocurrency, called the central bank digital currency, or CBDC.
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He said the central bank would issue a discussion paper this summer on the benefits and risks of establishing a CBDC, and seek public comment.
“We believe it is important that any potential CBDCs can serve as a complement, not a replacement, for current private sector cash and digital forms of the dollar, such as deposits in commercial banks,†added Powell. .
He also distinguished between volatile cryptocurrencies and so-called stablecoins, which are tied to the value of other currencies such as the US dollar.
“As the use of stablecoins increases, our attention must also be paid to the appropriate regulatory and supervisory framework,†Mr. Powell said, noting that companies that process crypto payments could be a point of further regulation. .
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The Treasury Department, meanwhile, said it was taking action now to regulate the crypto world. He announced that he would require that any transfer valued at US $ 10,000 (A $ 13,000) or more be reported to the Internal Revenue Service.
“Cryptocurrency already poses a significant detection problem by facilitating illegal activities at large, including tax evasion,” the department said as part of a larger announcement on the government’s efforts. President Joe Biden to crack down on tax evasion.
“This is why the president’s proposal includes additional resources for the IRS to deal with the growth of cryptoassets,†he said.
The regulatory attention comes after weeks of speculation the Biden administration was preparing for action in the crypto market, which has exploded in popularity and value in recent months.
This article originally appeared on the New York Post and has been reproduced with permission