Congress has been urged by the Biden administration to expedite the creation of a regulatory framework for cryptocurrency. The urgency is accompanied by a UN warning of an impending recession brought on by the Fed. Fed rates have started to sting, especially hard on developing nations.
The administration in the United States is feeling pressure as it works to expedite the creation of a regulatory framework for cryptocurrencies. Authorities have already warned that any additional delays could have a negative impact on investors. Investors are eager to enter the space as several countries move toward adopting cryptocurrencies. The Biden administration reportedly wants more information from regulators on how to regulate Bitcoin and other crypto assets because it is concerned about the possible repercussions of another stablecoin collapse.
In a report, the U.S. Financial Stability Oversight Council (FSOC) urged lawmakers to reach a consensus on regulations for the cryptocurrency spot market. However, officials who are aware of the situation have said that passing legislation is probably months away, so it is likely that no progress will be made this year as things stand.
There is competition between the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC) for control of the cryptocurrency market. The SEC wants to categorize digital assets as securities, which would be a significant setback for the cryptocurrency industry. In an effort to break the impasse, the FSOC report suggests collaboration between the two organizations to close any gaps, allowing operators to find good regulations.
The Biden Administration’s push for regulatory clarity coincides with a warning that the monetary policy of the central banks could cause a global recession. In a report released on October 3rd, the United Nations Conference on Trade and Development (UNCTAD) predicted that global economic growth could slow to 2.5% in 2022 before falling to 2.2% in 2023. The upcoming slowdown, according to the report, could cost the global economy $17 trillion, with developing nations bearing the brunt of the damage.
Interest rates have been aggressively increased by central banks around the world, endangering growth and making life more difficult for individuals, businesses, and even governments. Rate increases in the United States have significantly impacted less developed and poorer nations, causing their currencies to decline considerably in value relative to the dollar. When the currency is weak, less money is available for investment. However, this might also lead to a shift in favor of cryptocurrencies as investors use them to safeguard against the depreciation of fiat money.
According to the report, businesses with significant market power are taking advantage of the current situation to sharply increase markups and boost profits at the expense of less developed countries.
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