Christopher Waller (the Governor of the United States Federal Reserve Board Governor), while appearing at the Zurich-based SNB-CIF Conference of Cryptoassets and Financial Innovation in Switzerland, stated that there is a requirement for the regulation of the crypto ecosystem to get it accessed by a large span of public.
He mentioned that the financial mediators can assist in managing the hazards related to the exclusive crypto consumers, however, cannot eradicate them. As per him, the unique and rapidly-escalating financial goods require being trusted by the public for their survival. The executive quoted the historical instances to present the connection between regulation, technical innovation, as well as the accumulation of profits.
In his words, the latest technology, and an absence of transparent rules, signifies that a few unique riches were gained, even if some others were gone. Professional investors have the knowledge about the operation of the unregulated platforms and there may not be a requirement for regulation for them – or else they may not prefer it.
He referred to a recent survey conducted by the Fed which indicated that even after the substantial growth in the market of cryptocurrency during the previous years, just twelve percent of U.S.-based adult citizens possess crypto assets, and among them, 99% is of those who keep it for investment purposes. Mediators in the market of finance may intend to have a regulation due to the exclusive consumers with negative experiences in the crypto space who could get into quarrels with them.
Waller moved on to say that when the regular investors initiate losing the life savings thereof, without any reason except for wishing to take part in an exclusive market, a considerable increase can be witnessed for a joint action to be taken in this respect. The very demands can turn into individual losses’ socializations, like appeals for the compensation of the little investors having undergone losses due to the crash of the Terra (LUNA) ecosystem.
He was of the view that the respective development could assist in shielding against the recurrence of such a situation. To permit a wide reach to the ecosystem of cryptocurrency, as concluded by Waller, rather than the experienced consumers required by the ecosystem, the other public needs to be taken into confidence regarding the safety of the ecosystem, and the respective confidence cannot be programmed.