US Congress sets sights on federal cryptocurrency rules
US Congress sets sights on federal cryptocurrency rules
Bipartisan momentum is growing in the Senate and House of Representatives for action to address the risks posed by virtual currencies to investors and the financial system, they said.
Even free-market Republican conservatives, normally wary of government red tape, said regulation could be needed if cryptocurrencies threaten the US 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.
Digital assets currently fall into a jurisdictional gray area between the Securities and Exchange Commission (SEC), the Commodity Futures Trading Commission (CFTC), the Treasury Department, the Federal Reserve and individual states.
Much of the concern on Capitol Hill is focused on speculative trading and investing in cryptocurrencies, leading some lawmakers to push for digital assets to be regulated as securities and subject to the SEC’s investor protection rules.
“The SEC is properly the lead on the issue,” said Republican Representative Bill Huizenga, chairman of the House Financial Services Subcommittee on Capital Markets which will hold hearings on the issue in coming weeks.
Huizenga said the recent growth of the virtual currency market had made him more comfortable with more oversight. “Six months ago, we didn’t see this explosion. The marketplace has changed,” he said.
Carolyn Maloney, a Democratic senior member of the House Financial Services Committee, is another lawmaker advocating for direct oversight of digital assets by the SEC.
“A lot of people don’t realize there’s nothing backing these virtual currencies,” she said.
Virtual currencies have existed for years but speculation in them has recently ballooned, along with scams promising investors returns of over 1,000 percent in weeks.
In a time of volatile markets, hackers are also active in the sector, stealing $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 after surging more than 1,300 percent.
“We have to look carefully at all of the cryptocurrencies and make sure individuals don’t get taken advantage of,” said Representative Tom MacArthur, a House Financial Services Committee Republican.
Regulators globally have raised the alarm over cryptocurrencies, saying they may aid money laundering and terrorist financing, hurt consumers and undermine trust in the global financial system.
France and Germany want cryptocurrencies on the agenda for the upcoming G20 meeting of the largest advanced and developing economies.
Conservative Republicans also recognize the potential 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,” he said.
The SEC and CFTC chairmen recently called for greater scrutiny of digital assets before the Senate Banking Committee. Members of the panel said the regulators will return to discuss how to move forward.
While many lawmakers agree tighter oversight is needed, there is no consensus yet in Congress on how to proceed.
While some lawmakers say speculative investments should be classed as securities, others want digital currency transactions regulated as commodities.
The SEC is already cracking down on transactions known as initial coin offerings (ICOs), while the CFTC has identified digital assets as a commodity subject to its anti-fraud rules.
Turkey sees lower growth, double-digit inflation in next years
- The economy, which grew by 7.4 percent in 2017, would expand by just 3.8 percent in 2018 and then 2.3 percent in 2019
- For 2020 and 2021, the forecasts were more optimistic, with growth seen at 3.5 percent
ISTANBUL: Turkey, which was last month buffeted by its worst currency crisis in recent years, on Thursday forecast sharply lower growth coupled with persistently high inflation in its new medium-term economic program.
The economy, which grew by 7.4 percent in 2017, would expand by just 3.8 percent in 2018 and then 2.3 percent in 2019, according to figures unveiled at a presentation in Istanbul by Finance Minister Berat Albayrak.
Inflation, meanwhile, would balloon to 20.8 percent at the end of 2018, moderating only slightly to 15.9 percent in 2019, the figures showed.
For 2020 and 2021, the forecasts were more optimistic, with growth seen at 3.5 percent and 5.0 percent, respectively, while inflation is seen moderating finally to a single digit 9.8 percent in 2020 and then a year later to 6.0 percent.
Albayrak, who is a son-in-law of President Recep Tayyip Erdogan, said what he termed the “New Economic Programme” would be based on the three principes of “balancing, discipline, and change.”
“Our aim is to write a new success story,” he said.
Greater economic prosperity has been one of the pillars of Erdogan’s popularity in his over 15 years in power, with the country seeing impressive growth rates in consecutive years.
However economists have warned that the all-out push for growth has led to a potentially dangerous overheating, with inflation rampant, the currency account deficit widening and doubts over the health of the banking system.
These fault lines were exposed in August when a diplomatic spat with the United States caused a crash in the value of the lira, sparking fears of a full-blown economic crisis.
Albayrak said that in 2019 projects whose tender had not been carried out would be “suspended” and vowed Turkey would create two million new job opportunities by 2021.
“We will realize a program to totally fight against inflation,” Albayrak said, highlighting food inflation which has particularly worried Turks.
Markets greeted his assessments as realistic but the lira was trading lightly lower against the dollar at 6.2, a loss of 0.8 percent in value on the day.