Janet Yellen , US Treasury Secretary, calls for the need of more government regulations to manage and supervise the burgeoning market of digital currency as well as assets. This she expressed in her speech at American University in Washington, reports a news portal.
She added, the step will not only protect the interests of investing community but also put an end to the fraudulent and illegal activities flourishing in the crypto sector. Her words were focused on keeping the international status of US Dollar alive along with policy framework to regulate the digital currencies.
To regulate the crypto economy, it would require parameters of documentation for filing of taxes similar to stocks and bonds. “Taxpayers should receive the same type of tax reporting on digital asset transactions that they receive for transactions in stocks and bonds, so that they have the information they need to report their income to the IRS,” Yellen remarked.
President Joe Biden has already given a go-ahead to the creation of its own CBDC (Central Bank Digital Currency) or the digital dollar. Additionally, Biden also asked the Federal Reserve to take up a research on the Cryptocurrencies and their impact on financial holdings of a country.
The latest Ronin heist compels the government to rethink about the trading norms of the digital world where hackers managed to steal almost $620 million of crypto tokens. This is just one example from many of the fraudulent and illegal transactions in the digital currency market.
“We will make policy recommendations, including assessment of potential regulatory actions and legislative changes,” Yellen said.
The market of cryptocurrency and assets have revolutionized the whole economy. More and more people are becoming interested in the latest fad of digital world. Bitcoin and Ethereum are becoming a household name now. Common man is generally fascinated by the quick money gains in the cryptocurrency which is rather highly volatile and may bring huge losses instead of profits. Criminals see an opportunity to meet the needs of illegal transactions by keeping themselves anonymous. Cyber attackers look for the loopholes to tamper the accounts of people.
Yellen, therefore, opines that the regulatory framework should take up the best of the two by amalgamating safety and innovation. “Our regulatory frameworks should be designed to support responsible innovation while managing risks – especially those that could disrupt the financial system and economy,” Yellen said.
