Shock Analogy of Cryptocurrencies from CFTC Commissioner: “Like the 2008 Global Crisis…”

Christy Goldsmith Romero, commissioner of the U.S. Commodity Futures Trading Commission (CFTC). cryptocurrency He said that although the industry is a small part of the U.S. financial system, the growing attention of “traditional finance” firms should warn regulators of dangerous future risks.

Risk Rises as the Link Between Cryptocurrencies and a Traditional Finance Company Increases

Speaking at the International Swaps and Derivatives Association conference in New York on Wednesday, the commissioner said:

“In the future, financial stability risk will increase and could escalate to systemic risk if there are greater interconnections between the cryptocurrency industry and traditional financial companies performing critical market functions.”

Goldsmith Romero, chief commissioner of the institution’s technology advisory committee, said that just as other current US regulators have argued, the crypto industry reflects certain elements of the financial sector in the lead up to the 2008 global collapse.

Goldsmith Romero, who holds one of the Democratic seats in the five-person commission that oversees the derivatives trade, used the following statements on the subject:

“Cryptocurrency needed to break away from the traditional financial system and all of its vulnerabilities and weaknesses.

But this spring, unregulated crypto markets revealed their vulnerability to financial stability risks similar to traditional finance, with themes similar to the 2008 financial crisis.”

While suggesting that the US should not rush regulations, he presented the CFTC as a solution to deal with the industry’s risk:

“Congress can address financial stability risks by giving the CFTC additional mandate.”

According to several bills that would authorize the spot market or markets where actual token trading between investors, the CFTC bitcoin and gaining strength in Congress to become the primary regulator of crypto trading.

*Not investment advice.