May 31, 2021 - Economy

U.S. plans crypto crackdown

Illustration of a hand covering a coin

Illustration: Eniola Odetunde/Axios

U.S. financial authorities are preparing to actively regulate the $1.5 trillion cryptocurrency market amid growing concerns of a lack of oversight, the Financial Times reports.

Why it matters: New efforts under the Biden administration reflect a break from the Trump-era approach, in which the administration at times encouraged cryptocurrency use within the financial system.

Michael Hsu, who was appointed this month as acting U.S. Comptroller of the Currency, told the FT that he wants U.S. officials to work together to set a "regulatory perimeter" for crypto.

  • Hsu testified at a congressional hearing earlier this month that, after seeing fintechs create new payment processing tools, "it is hard not to feel some déjà vu" to the years preceding the 2008 financial crisis.
  • The new techniques give rise “to a large and less regulated shadow banking system," he said.
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