By Hamza Fareed Malik
Crypto regulation would be good for financial stability, consumers, and industry efficiency as regulators around the world decide on appropriate laws, Moody’s says.
Clear regulations that seek to prevent fraudulent activity and provide guidance to companies would “protect consumers and ensure that the industry does not become a source of financial instability,” the financial services company said in a report yesterday.
Moody’s highlighted that such laws are likely to weed out any “inefficiencies” in the industry. These would become apparent as laws are put in place, with crypto’s competitive advantages stemming from a lack of regulatory oversight.
A clearer regulatory framework would also “allow for any potential benefits from the crypto industry to be realised.”
The crypto industry is currently not regulated with governments and regulatory bodies around the world working to bring crypto under their oversight.
The EU is ahead in the race and agreed on regulations under the Markets in Crypto Assets (MiCA) regime, which is set to become the world’s first proper regulatory framework for crypto.
“As regulators in the US, EU, and other countries work to find the ideal balance for a new and effective regulatory framework over time, it will also be important to achieve international consistency in regulatory and supervisory approaches,” Moody’s said.
The company highlighted the task of managing regulation while also ensuring that innovation is not harmed, a key concern among regulators and crypto players. The UK in particular seeks to become a “global hub” for crypto.
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