Yerevan (CoinChapter.com) – Following the turbulent week for the crypto market that saw prices plummet, lawmakers in the United States will be looking for ways to push for stronger regulations. The latest dip saw the price of Bitcoin, the largest cryptocurrency, go as low as $34,756.64 this week.
As the financial regulators tried to provide answers to US Congress members, the market indicators spoke loud and clear about the need to regulate the crypto space. With high losses and subsequent high returns registered in a matter of hours, it became evident that the financial giants were ill-prepared.
“We are in the process at the Fed of studying the various ways to address this issue,” Randal Quarles, the Federal Reserve’s Vice Chairman of Supervision, said. According to Quarles, it was too early to provide answers, and the federal agencies need more time to study and come up with a regulatory framework.
Calls for Regulations Intensify
Critics of the crypto industry have always pointed out some of the major drawbacks of the decentralized financial system.
Fears of money laundering, fraud, terrorism funding, etc., are some of the issues regularly pointed out by those that would like to see the market supervised and regulated. However, one of the most important factors that proponents of regulations point out is market manipulation.
As the market stands, a lot depends on tweets and forecasts by celebrities and big industrial names. This causes a lot of volatility in the market. For example, the prices of Bitcoin saw big fluctuations due to Tesla CEO Elon Musk’s adventurous tweets and TV appearances.
Similarly, decisions that were taken by Chinese authorities regarding the crypto space saw a surge in panic-selling, thus causing the prices to drop to unimaginable lows.
The Authorities Remain Clueless
Despite all the noise that the cryptocurrency industry has been making, the US Congress remains clueless about what needs to be done. In a stark display of this fact, US Representative Al Green relied on Randal Quarles to hint on how Congress should regulate the market.
“I’m trying to figure out what we can do. This is a serious issue. We need your expertise”, he asked.
Similarly, Senate Banking Committee Chairman Sherrod Brown expressed concerns over the volatility of the crypto market. “It tells me that fintech companies and others operating outside the regulatory system can pose a danger. I don’t know the solution yet with these, but it’s cause for concern“, he remarked.
But despite the worrying trends in the crypto market that saw investors and critics ride on an emotional rollercoaster, financial regulators appeared unaffected.
Michael Hsu, the acting Comptroller of the Currency, informed that he and other regulators are trying to set up an inter-agency task force on cryptocurrency.
Lack of investor protection is a big concern for those criticizing the market volatility.
Australian Senator also Calls for Regulations
The issue of market volatility has become a point of discussion in other countries as well. Australian senator Andrew Bragg has urged regulators to develop clear and comprehensive regulations to encourage innovation and ensure global competitiveness.
Bragg is a member of the ruling Liberal Party. He also chairs a senate committee conducting an inquiry into Bitcoin and other digital assets. He believes that by regulating the cryptocurrency industry, Australia will stay ahead of the game. According to him, regulations will also protect consumers and investors.
Meanwhile, the market continues to depend on individuals that manipulate the prices as and when they please. Governments and watchdogs will look to regulate the cryptocurrency market in the weeks to come.