The US Treasury Dept’s Financial Stability Oversight Council (FSOC) has concerns on cryptocurrencies; and also their ability to affect the country’s existing financial system.
The Dodd-Frank Act created the council to help identify problems with financial stability in the United States. Stablecoins, according to the council, might endanger the nation’s financial system if the business is not in proper control.
According to the report, “Crypto-asset activities could pose risks to the stability of the U.S. financial system” if their connections to the traditional financial system or their overall scale were to increase without abiding by or pairing with appropriate regulation, including enforcement of the existing regulatory structure.
The FSOC issues a warning despite the fact that connected to the current system is still fairly modest, stating that choke points like stablecoins and trading platforms may provide future risks.
The council claims that enforcing and abiding by present laws is a “key step” in minimizing these potential hazards.