Former FDIC Chair Calls for a New Regulatory Framework for Cryptocurrency
Sheila Bair, a former chair of the Federal Deposit Insurance Corporation (FDIC), says the US should develop a regulatory framework for the crypto sector from scratch.
During the CB Insights’ Future of Fintech Conference held on 21st June, the former chairman of FDIC approached the subject of cryptocurrencies and mainly about their monitoring.
Bair added that “regulators get a bad rep on this … [but] money transfer law is weird.”
“We are trying to jam [cryptocurrencies] into state money transmission laws, it just doesn’t work. I think at some point, we will need a federal framework to have some type of regulatory oversight of exchanges established to trade crypto assets. They may also be securities, if there is an [initial coin offering] being used to raise equity, they need to regulate it,” she continued.
The 19th Chair of the U.S. The Federal Deposit Insurance Corporation (FDIC) believes that regulating the crypto sector is a necessary move, referring to actions that will happen in the near future. She claimed that the private sector will oblige financial institutions’ to list private virtual currencies, because “everybody hates bank account fees, the retailers hate interchange fees.”
“If there is a way to get around that, I think you can see a shift [fairly] quickly,” Bair said, adding that “I do think the Fed needs to get ahead of this” as she is a Fedcoin supporter.
Sheila Bair continues to support FedCoin, arguing that the services it offers might resolve transitional issues while giving the Federal Reserve the opportunity to operate effectively with US money supply. According to her statements, compared to a financial institution demanding a 1.95 percent interest rate, Fedcoin could reduce it by 0.01 percent through savings accounts.