The resurgence of cryptocurrencies comes during a time when United States legislators are considering new rules and laws to govern the unpredictable digital asset market.
Both Republications and Democrats are one in the thinking that action is needed to tackle the risks brought about by virtual currencies to investors and the financial system.
Even free-market Republican conservatives, usually wary of government red tape, remarked that regulation could be necessary if cryptocurrencies pressure the American economy.
“There’s no question about the fact that there is a need for a regulatory framework,” said Republican Senator Mike Rounds, a Senate Banking Committee member in a report on Metro News.
Carolyn Maloney, a Democratic senior member of the House Financial Services Committee, is yet another lawmaker who is pushing for direct oversight of digital assets by the SEC.
“A lot of people don’t realize there’s nothing backing these virtual currencies,” she recently stated. Virtual currencies have been around for years but speculation in them has recently inflated, together with scams pledging investors returns of over 1,000% in just a few weeks.
In a time of unstable markets, hackers have also been just as vigorous in the sector, thieving $530 million of digital currency from Japanese exchange Coincheck last month.
Bitcoin, the best-known virtual currency, lost over half its value earlier this year in a sudden free fall after soaring more than 1,300%
“We have to look carefully at all of the cryptocurrencies and make sure individuals don’t get taken advantage of,” relayed Representative Tom MacArthur, a House Financial Services Committee Republican.
Regulators from around the world have raised the alarm over cryptocurrencies, stating it may help money laundering and terrorist financing, hurt consumers and weaken trust in the financial system.
France and Germany have pushed for cryptocurrencies to be on the agenda for the upcoming G20 meeting of the largest advanced and developing economies.
Conservative Republicans also acknowledge the likelihood for broader risks.
“I’m a total free-marketer, so I don’t want to regulate,” said Republican Representative Dave Brat, a member of the conservative House Freedom Caucus.
“But if it’s a currency that could destabilize the whole economy, you’re going to have that conversation,” Brat said.
Yesterday, cryptocurrency investors were cautioned they could lose their life savings at any time” due to the unpredictability of the cryptocurrency market.
Vitalik Buterin, the 24-year-old Russian who helped establish Ethereum, dreads that anyone who invests their hard-earned cash into virtual currencies could be financially crippled in the blink of an eye.
