T WELVE YEARS after bitcoin was born, governments are still struggling to cope with cryptocurrencies. Britain has banned Binance, a crypto exchange and the European Union's regulators want transactions to be more traceable. On August 3rd Gary Gensler, the head of America's Securities and Exchange Commission, said cryptocurrency markets were "rife with fraud, scams and abuse" and called on Congress to give his agency new regulatory powers. The price of bitcoin, the biggest cryptocurrency, gyrates with regulators' every word. Governments have an obligation to fight the deception, tax evasion and money laundering that plagues the crypto world. Police seizures of bitcoin suggest that they are becoming more zealous. The harder issue they must grapple with is whether cryptocurrencies threaten the financial system. Were bitcoin to collapse, our crypto "stress test" suggests that its holders would lose hundreds of billions of dollars but that the fallout would be manageable. Yet there is another danger posed by "stablecoins", a special type of cryptocurrency that pegs its value to conventional money. Pledges of stability often lead to financial crises. Because banks offer deposits that are redeemable on demand and superficially riskless, but which are backed by longer-term, less liquid and riskier assets, they… Read full this story
- Italy against German proposal of regulating sovereign holdings in banks
- Passenger slams Regent Seven Seas Cruises for ‘treating him like a criminal and bundling him off ship’ after he had his passport stolen
- ASIC launches 'voluntary' crackdown on banks mis-selling credit cards
- Zuckerberg’s call to regulate Facebook explained
- ‘This is Our Land’: Israel’s Netanyahu Vows to ‘Extend Jewish Sovereignty’ to West Bank Settlements
- Deutsche Bank, massive payoffs and being rewarded for failure
- We will not raise capital at any price, we will wait for prices to correct: Ravneet Gill, YES Bank
- Trump's Treasury Pick Steven Mnuchin Ran a Bank Critics Call 'A Foreclosure Machine'
- Loans to get cheaper as banks will pass on rate cut
- Banking royal commission: The financial sector's descent to the fourth circle of hell
Why regulators should treat stablecoins like banks have 337 words, post on www.economist.com at August 7, 2021. This is cached page on wBird. If you want remove this page, please contact us.