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| 1 minute read

Has the Crypto Bubble Burst?

The need to strengthen regulation and supervision of stablecoins and other crypto-assets, has come to the forefront after recent turmoil in markets have showed weaknesses and volatility that regulators are getting increasingly concerned about.

Regulators have started to scrutinise whether Stablecoin or  Central Bank Digital Currency (CBDC) should be the way to go. With speculation growing about the long-term future for Bitcoin and its rivals, has the crypto bubble burst – and what’s next for this once-promising sector? 

While the international regulatory community is actively engaged in discussions around crypto assets, approaches are varied and often only partially address potential risks. There have been concerted efforts by policy makers in the U.S. and Europe, with Hong Kong and Singapore also tightening up rules to govern and ensure stability of digital assets. 

Cryptocurrency regulation can be a hot button topic, but plenty of experts say it’s actually a good thing for investors and the industry. 

More regulation could mean more stability in a notoriously volatile crypto market. It also has the potential to protect long-term investors, prevent fraudulent activity within the crypto ecosystem, and provide clear guidance to allow companies to innovate in the crypto economy.

The views expressed herein are those of the author(s) and not necessarily the views of FTI Consulting, Inc., its management, its subsidiaries, its affiliates, or its other professionals. 

FTI Consulting, Inc., including its subsidiaries and affiliates, is a consulting firm and is not a certified public accounting firm or a law firm. 

The framework follows an executive order issued in March, in which President Joe Biden called on federal agencies to examine the risks and benefits of cryptocurrencies and issue official reports on their findings. For six months, government agencies have been working to develop their own frameworks and policy recommendations to address half a dozen priorities listed in the executive order... Together, these recommendations comprise the first, "whole-of-government approach" to regulating the industry... To make stablecoins "safer," the administration says the Treasury will "work with financial institutions to bolster their capacity to identify and mitigate cyber vulnerabilities by sharing information and promoting a wide range of data sets and analytical tools," as well as team up with other agencies to "identify, track, and analyze emerging strategic risks that relate to digital asset markets."