US GAO says lack of interagency cooperation needs to be addressed in crypto regulation


The U.S. Government Accountability Office, a valuable Congressional review agency, just finished compiling an informative, 77-page report, requested by Reps. Maxine Waters and Stephen Lynch before elections, about the legal framework behind blockchain tech in finance. As anticipated, tightened regulations are necessary in light of the crypto asset trading platforms and stablecoins left unregulated, and the current hodge-podge initiatives by the Securities Exchange Commission (SEC), CFTC and State Legislatures being incommensurate and not fruitful. The report pointed to liquidity of non-security crypto assets (exploring “turf war” issues), while the traditional equivalents enjoy steady monitoring – such as through FinCEN and Transmitter Licensure programs. Additionally, some regulations for stablecoins refer to backing composition, auditing, transparency and withdrawal prerogatives.

Decentralized systems, like those primarily dependent on blockchain technology, have the capability of being regulated in times of appropriate decentralization. Beyond these, and due to current sharp decreases along with bankruptcies across digital asset markets that may concretely harm investors, the GAO evaluated President Biden’s Executive Order (April 2022) aiming to gather a unified strategy in liquid asset regulation and mediately hitting risks at suit, lending prior suggestions in upholstering agency around the clock coordination to furnish timely responses. The feds signalled their agreement while affirmatively declining remaining dissent. Historically, GAO’s recommendations exert influential moral authority.

Cryptocurrencies, under aforementioned watch, foster trust in more cost-efficient and speedier transaction tools — though drawing focus to implicated eventual risks.

Robert Wilson author
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