For Christopher Waller, governor of the US Federal Reserve, the regulation of cryptocurrencies will serve to protect lay investors. His speech took place this Friday (3) at a conference in Switzerland.
“The main issue in crypto-asset regulation is not how to protect savvy crypto-investors; it’s like protecting the rest of us.”
Their justification is that the general public is not only unable to buy cryptocurrencies on their own, but also lacks knowledge about security issues, such as storing private keys.
The US Central Bank’s solution is simple: ban
Citing the possibility of some people losing money due to lack of knowledge, the governor of the US Central Bank points out that the best way is to simply ban people from using such services.
“New retail users, by definition, have no crypto experience,” argues the Fed’s Christopher Waller. “They don’t know how to independently buy a crypto asset, how to obtain and secure a private key, how to conduct negotiations over a DeFi protocol, or how to write a smart contract.”
“They need help […], exchanges, wallets and other intermediaries are willing to provide it. But while intermediaries can help monitor and manage risk, they cannot eliminate it. In such a volatile market, any user still has a significant chance of losing their money.”
In other words, the government does not provide financial education and, to remedy the situation, it now wants to impose restrictions on investments. As such, ordinary people will not only lose opportunities but will never gain experience, remaining dependent on the state. Again, one of the points mentioned was the collapse of Terra (LUNA) and the stablecoin TerraUSD (UST), likely triggering a more severe global regulation.
“We saw this just a few weeks ago with what can only be described as a ‘race’ in the Earth ecosystem.”
Interestingly, these two cryptocurrencies also caused losses to major players, such as investor Mike Novogratz and even the giant Binance, which lost billions of reais invested. Therefore, cryptocurrencies punish everyone, not just laymen, and the same is true of the stock market.
Cryptocurrencies are evolving on their own
During the beginning of Bitcoin, everything was more difficult. People needed to sync their entire blockchain to use a wallet, save giant private keys full of random characters. However, the years passed and the industry began to create solutions, such as lightweight wallets (SPV) and user-friendly design. In addition, the long private keys have been replaced by seed phrases, usually 12 words long, making them easier to handle. Such examples go further, including various learning materials created often for free. However, this is enough to show that the industry itself is more concerned about its users than governments. Finally, it is difficult to believe that the maneuvers of Central Banks are related to user safety. Apparently, they just want to continue their control over the masses.
