Finance

A key US watchdog wants officials to set up a ‘regulatory perimeter’ for cryptocurrencies

  • A US banking regulator said he would like to see a “regulatory perimeter” for cryptocurrencies.
  • Michael Hsu told the Financial Times that there was growing interest in regulating crypto.
  • US and global officials have expressed concerns that retail investors could get burned by bitcoin.
  • See more stories on Insider’s business page.

The US’ Comptroller of the Currency has said he hopes officials will set up a “regulatory perimeter” for cryptocurrencies.

Michael Hsu, who oversees the country’s national banks, told the Financial Times that agencies overseeing the US financial system want to coordinate “a lot more” on the $1.5 trillion cryptocurrency market, which has boomed in 2021 but crashed sharply two weeks ago.

The comments were one of the clearest signs yet that US regulators plan to take a more active role in the cryptocurrency market.

“It really comes down to coordinating across the agencies,” Hsu said. “Just in talking to some of my peers, there is interest in coordinating a lot more of these things.”

Officials around the world worry that the crypto boom is sucking in amateur traders who could get badly burned. Bank of England governor Andrew Bailey said earlier in May that people should “buy them only if you’re prepared to lose all your money.”

In the US, there are growing signs that President Joe Biden’s administration wants to take a more hands-on approach than Donald Trump’s White House.

Biden’s Treasury Secretary Janet Yellen said in February that “the misuse of cryptocurrencies and virtual assets is a growing problem.” She highlighted their use in money laundering, terrorism and drug trafficking.

Hsu, who was appointed as Acting Comptroller by Yellen, said innovation in finance through technologies like blockchain and the rise of fintech companies reminded him of the financial crisis. He said new technologies brought great promise, but also great risk.

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