New York Attorney General Letitia James has urged the US Congress to pass legislation that would ensure the regulation of the cryptocurrency market. She emphasized the threats that the crypto industry may pose to financial stability and national security.
This is reported by Business • Media
Threats Associated with the Crypto Industry
Letitia James noted that the proliferation of cryptocurrencies could undermine the dominance of the US dollar on the global stage. She expressed concern that the widespread adoption of digital assets complicates the US’s ability to control global financial flows, particularly through sanctions mechanisms.
Furthermore, according to James, crypto instruments are being used by hostile states, such as North Korea and Iran, to evade sanctions and fund military programs. She also highlighted risks to the traditional banking system, citing the collapses of Silicon Valley Bank and Signature Bank in 2023, which were linked to cryptocurrencies.
Proposals for Regulating the Crypto Market
The Attorney General proposed several initiatives, including mandatory registration of all players in the crypto market through the US Securities and Exchange Commission. Among other recommendations:
- fraud checks on tokens;
- a ban on combining the roles of issuer, broker, and custodian within one company.
“The US must require that stablecoins are backed by US dollars or Treasury bonds on a one-to-one basis and that they are issued by companies with a presence in the US, subject to US laws, and under the oversight of federal and/or state authorities,” James stated.
She also emphasized that digital assets are not suitable for retirement savings due to their high volatility. The Attorney General drew attention to the dominance of USDT in the US short-term bond market, which requires careful oversight of stablecoin issuers.
It was previously reported that the US Securities and Exchange Commission’s Crypto Task Force plans to hold several roundtable discussions focused on regulating cryptocurrency assets.