Christopher J. Waller, Governor member in Federal Reserve Board has stated that crypto-asset regulation is needed to protect the general public who has not invested in crypto-assets. The regulation would bolster confidence of general public in ecosystem safety.
The above observation was made by Mr. Waller during an address at SNB-CIF Conference on Cryptoassets and Financial Innovation in Zürich, Switzerland. According to him, “The main issue in crypto-asset regulation isn’t how to protect sophisticated crypto-investors; it’s how to protect the rest of us.”
Mr. Waller acknowledged that crypto-asset markets have grown on unexpected lines. And, so has grown public awareness and government attention. Innovation in financial technology is happening fast and people are using this new technology in various finance applications. Like with any innovation in technology, the regulatory mechanism is not initially available to match the growing pace of technology. In such a situation, crimes like fraud and theft occur at a regular speed.
Speaking from the perspective of crypto market players, Mr. Waller said that they may not want any regulations for crypto-market as it would raise cost and cripple innovation. While from the view point of crypto-asset users and investors, Mr. Waller said that in a volatile market like crypto-market, any crypto investor faced high risk of losing their money.
Mr. Waller, speaking of crypto-investors loss of money, said that their loss has severe impact on society where even those innocent people who have not participated in crypto-market by any kind of investment or controlling power, have to bear the brunt for no fault of theirs. And this, according to Governor Waller, from a social angle, becomes politically and morally unbearable.
“From a social perspective, there is another possible outcome when losses become widespread: Those losses become practically, politically, or morally intolerable.“
How to keep the confidence of these uninvolved innocent (who have chosen not to invest in Crypto-assets) members of the public in ecosystem’s safety is the moot question which needs to be addressed, concluded Mr. Waller.
