Taking the global cryptocurrency sphere in a storm, the US Federal Reserve head Jerome Powell has hinted towards adopting a strict action plan by the financial watchdog for the native crypto industry.
The spearhead, in a viral video message, conveyed that the use of electronic currency puts financial stability under dire risks, which can be controlled with stringent rules and regulations. The video highlighted the path to be adopted by the Federation for presenting its virtual currency in the global market space. The decision taken by the financial organization can influence the crypto market greatly by causing fluctuations in the price value of the assets. Recently, Bitcoin dropped by 30% post China’s announcement of imposing new limitations on the sector.
As per the report, the Finance Department is concerned about the tax implications arising from crypto trading. The authorities feel that the rich investors can take advantage of the loose regulatory setup of the crypto domain to get away with their tax duties. By bringing stricter guidelines, the Department is looking forward to bring such transactions into the account of the concerned authorities for proper taxation purposes. The Fed believes that cryptocurrencies aid tax evasion, especially because of the increasing frauds.
Talking about the tech development, Powell stated that it is necessary to bring private financial players presently not under the regulatory framework under the umbrella. His comments signaled the Fed’s concern towards the growing popularity of digital assets in the sector. The organization sees crypto tokens as highly speculative and dynamic. Powell conveyed that the Federation would present a detailed report on virtual payments this summer and seek a public response. The paper will highlight the merits and demerits of a central bank-pegged virtual currency.
On the one hand, China is pacing fast with the pilot runs of its highly-anticipated Digital Yuan project, and the USA is keeping a slow pace in this regard. A few days back, Powell commented that the Fed is not in a rush and focuses on making things right. An expert team of MIT and the Boston Fed are working on a CBDT-based technology project and will release their report in the third quarter. The chairperson of SEC stated that he is looking forward to stringent regulatory controls on crypto exchanges. This will allow users to enjoy protection during trading in such exchanges.