Federal Reserve Vice Chair Lael Brainard said on Friday that the United States should start imposing new rules related to the crypto industry before the market becomes too large and starts imposing substantial risks to the economy. Specifically, new rules should tackle investor protection issues, even though it is something that is fundamentally different from the very nature of cryptocurrencies as traditional regulation does not apply to them.
Brainard emphasized this market's vulnerability, saying it is ''the right time'' for these changes to be established "to help investors distinguish between genuine, responsible innovation and the false allure of seemingly easy returns that obscures significant risk."
Earlier this month, the European Union also stressed there is a need for "harmonization" among its member states when it comes to national crypto regulations, as countries have not been advancing in the same way in this matter, fearing that might pose challenges for the oversight of the industry before the agreement on MiCA enters into force.
