The professor stated that “finally what these types of regulations provide for the industry is legitimacy.”
Cornell Professor in Crypto Industry Benefits from Biden’s Executive Ordnance
In an interview published by CNBC on Thursday, Eswar Prasad (Professor of Economics at Cornell University) shared his thoughts about U.S. President Joe Biden’s crypto executive orders and its implications for the sector.
Prasad is Nandlal Pa. Tolani senior lecturer in trade policy and professor of Economics at Cornell University’s Charles H. Dyson School of Applied Economics and Management. He was previously the chief of the Financial Studies Division in the International Monetary Fund’s Research Department and the IMF’s China Division.
He has warned repeatedly about the dangers cryptocurrency poses for monetary and financial stability. He stated that Bitcoin might not last for much longer in December 2013.
On Wednesday, President Biden issued an executive directive regarding the regulation of cryptocurrency. Professor explains that the executive order “tasks different U.S. institutions and agencies to develop a comprehensive plan for regulation of a wide range of digital assets including bitcoin, as well as stablecoins.” The executive order also examines the possibility of launching a digital U.S. Dollar.
The professor continued:
Regulating in all these areas is necessary, as it is still a Wild West. There are many opportunities for decentralization, as well as the possibility of new technologies potentially democratizing financial services.
Prasad said that there was a possibility that these technologies could be used to finance illicit activities. They may not provide the investor protection necessary to ensure that retail investors are aware of the risks involved.
The professor also explained that there is a financial stability risk, even from stablecoins. While they may seem safest, they are starting to function essentially like unregulated money market mutual fund mutual funds.
The Cornell professor stated that the idea behind the “executive” order was to think about the functionality and regulate these technologies.
It might actually be beneficial to the industry. Because, ultimately, these regulations give legitimacy to the industry.
Prasad observed that while the details of the regulation may be criticized by the crypto industry, he believes that they should be positive overall.
He concluded, however:
Overall, regulatory clarity is going to be a huge help for the industry. It could also allow the industry to harness the potential benefits of these new technologies and mitigate the risks.
Many people working in the crypto industry are encouraged to take part in Biden’s crypto executive orders. An executive at a crypto company described it as “an affirmation that crypto will stay”.
