The largest bank in Switzerland, UBS, published its view on U.S. crypto legislation Friday after the House of Financial Services Committee held a lengthy hearing on the regulation of cryptocurrencies and stablecoins last week.
The Swiss bank’s U.S. Office of Public Policy explained that at the hearing, a senior Treasury official discussed recommendations made in a stablecoin report issued by the Department of the Treasury and other regulators.
“To fill in regulatory gaps and address financial stability concerns, the regulators would like Congress to develop legislation that regulates stablecoin issuers as banks,” the UBS team detailed, noting that this proposal has received pushback from some lawmakers.
The Federal Reserve also made it clear in its recent central bank digital currency (CBDC) report that it would like direction from Congress before proceeding with a digital dollar.
However, Switzerland’s largest bank believes:
It will take time for lawmakers to digest the complexities of these issues and reconcile potentially divergent approaches on how digital assets should be regulated.
The UBS team further detailed: “Regulators could be waiting a long time for Congressional action and in the meantime will need to grapple with these issues using the limited and imperfect authorities they already have.”
Nonetheless, the bank pointed out that interest in crypto assets “is growing in Congress and among the broader public.”
Furthermore, there are reports that the Biden administration may weigh in on cryptocurrency legislation with an executive order in the near future.
In August last year, U.S. Senator Ted Cruz slammed his colleagues in Congress for trying to regulate crypto without an understanding of what it is.
The senator from Texas said: “We shouldn’t regulate something we don’t yet understand. We should actually take the time to try to understand that. We should hold some hearings, we should consider the consequences … We shouldn’t destroy people’s lives and livelihoods from complete ignorance.”
Meanwhile, two federal agencies — the U.S. Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC) — are collaborating to ensure investor protection in the crypto space.