Cryptocurrency market leaders warn that excessive regulation will stifle innovation. The bitcoin price has advanced more than 7% even with the potential banking regulatory oversight looming to currently hover at USD 37,568. Despite today’s gains, bitcoin has shed more than one-third of its value since its April peak of USD 63,729.
The proposal, which was submitted by Basel Committee for Banking Supervision, a BIS committee, was created in response to heightened demand for bitcoin and altcoins. Regulators can no longer stick their heads in the sand about the market, and they want banks to take a conservative approach to handling digital assets.
Under the proposal, banks would be required to hold USD in reserves that is commensurate with the amount of bitcoin they possess. The regulator is looking to attach a 1,250% “high risk weight” to bitcoin in search of ” a conservative outcome for direct exposures of cryptoassets,” according to the proposal.
The bank regulator in chief listed the following risks associated with digital assets, saying it is looking to address these concerns:
- consumer protection
- money laundering
- terrorist financing
- carbon footprint (think Elon Musk)
Mainstream Media Coverage
Alexis Ohanian, co-founder of Reddit, discussed cryptocurrencies on CNBC today, calling it a “fascinating time.” On one hand, El Salvador is looking to name bitcoin as legal tender, while the U.S. is moving toward cracking down on the space.
Ohanian believes the industry requires a “delicate balance” between embracing innovative technology and thwarting the risks. He warned that any “heavy hand” regulation would be detrimental to the United States as other countries take leaps forward.
Meanwhile, bitcoin bull and MicroStrategy chief Michael Saylor on June 9 was featured as a guest on Sean Hannity’s prime-time show on Fox News. Hannity, whose show that bears his name reaches millions of viewers, also tweeted a profile picture of himself on Twitter with laser eyes, a sign that he is drinking the crypto Kool-Aid.
MicroStrategy recently announced it is selling USD 500 million in bonds, the proceeds from which it will direct toward buying more bitcoin. The software maker already holds billions of dollars’ worth of BTC on its balance sheet. Saylor believes that bitcoin is headed for the moon.