U.S. Crypto & Policy Watch

U.S. Treasury Official: Creating Regulatory Framework For Digital Assets Will Be Complex

The U.S. Treasury’s top official responsible for the financial sector said in a speech this week that crafting developing regulations for digital assets will be complex, a reflection of the nature of the assets themselves as well as the fact that the new rules will have to be part of a broader government approach that also accounts for other objectives, such as uniform currency, global competitiveness, as well as equity, inclusion, and privacy goals.

Nellie Lang, the Treasury’s Undersecretary for Domestic Finance noted in her prepared remarks that while digital asset innovations may offer benefits, there are various types of risks as well — describing them as “high-risk, high-return” assets.

“A first-order task of regulators is to bring about compliance with existing rules to guard against these risks,” Lang said. “Regulators need to ensure that banks that provide related services, such as custody, can ensure safety and soundness.”

What will be more challenging, the former Federal Reserve official predicted, is how to address risks posed by relatively novel aspects of decentralized finance.