Context and significance for the market
The issue of regulation of cryptocurrencies and other digital assets is key to the development of this market. Banks and financial institutions wishing to work with cryptocurrencies need clear and understandable rules that would exclude legal uncertainty.
As noted by the former head of the US Commodity Futures Trading Commission (CFTC), Christopher Giancarlo, clarity in regulation is more important for banks than for other cryptocurrency market participants. Banks, unlike crypto startups and private investors, bear significant responsibility to their clients and regulators, so they need clear rules of the game.
Prospects in the US
If the CLARITY (Cryptocurrency Online Transparency Law Act) bill, aimed at creating regulatory clarity, is not passed, Giancarlo expects that Paul Atkins at the SEC and Mike Selig at the CFTC will likely write rules to bring certainty to cryptocurrency operations.
Such a situation, when regulators are forced to act while legislators cannot reach a consensus, is quite typical for emerging markets. Given the growth rate of the cryptocurrency industry, clear and timely regulation is vital for its further development.
Conclusions
Clarity in the regulation of cryptocurrencies and digital assets is indeed more important for banks and traditional financial institutions than for other market participants. Banks, working with client money, bear greater responsibility and need clear rules. If lawmakers cannot provide them, regulators will likely take on this function themselves to avoid slowing the development of the cryptocurrency industry.