Cryptoskeptic is Joe Biden's top economic adviser
On February 15, Vice Chair of the Federal Reserve Lael Brainard will be named President Joe Biden's top economic adviser.
To succeed Brian Deese as director of the National Economic Council, the White House has been considering several senior federal employees, including Brainard and deputy Treasury Secretary Wally Adeyemo. The evaluation was won by Brainard, a Fed governor since 2014 and a former treasury official under the Obama administration. Before President Biden's nomination of Jerome Powell, she was the front-runner for the position of Fed chair; as a result, Brainard was appointed as the bank's vice chair and No. 2 official. Brian Deese, the outgoing NEC director, will be replaced by Brainard as the central bank decides when to halt its ongoing efforts to reduce inflation and raise interest rates in the nation. The White House, the Fed spokesperson, and Brainard have declined inquiries about the integrity of the news.
According to her responses to significant debates, Brainard is one of the Fed's most dovish officials. For example, Brainard emphasized that the central bank can reduce inflation rates without raising unemployment rates as the institution debated raising interest rates to combat inflation.
Based on her previous comments on the sector, the news of Brainard's appointment has prompted reactions from key figures in the cryptocurrency industry as they wait to see what happens next. Based on her remarks at the Bank of England conference in London, her involvement in the crypto industry might be cause for concern.
The top economic advisor to the incoming Joe Biden stated that regulations are necessary to prevent the cryptocurrency sector from endangering the financial system. She noted in her speech that while innovations speed up, reduce costs, and broaden access to financial services, sound regulations are necessary to prevent the innovations from spreading and causing instability in the more extensive financial system. Brainard emphasized the erratic nature of cryptocurrencies and urged the government to establish foundations for industry regulation. She cited recent occurrences that have shaken the cryptocurrency sector, including attempts to create decentralized stablecoins, Terra's demise, and Three Arrows Capital's decision to liquidate its cryptocurrency hedge fund.
According to the Fed official, financial innovations and technologies cannot transform risky assets into safe ones. However, she was happy to point out that the crypto industry has not sufficiently undermined the traditional financial system. Constraints would effectively continue to regulate the relationship between cryptocurrencies and the conventional financial system. The main issue that worries Brainard about cryptocurrency is that someone has to pay for risk evaluation, keep resources to mitigate risks, obey the law to prevent terrorism and crime, and treat all customers fairly. She emphasized that nobody is responsible for these tasks in the DeFi and cryptocurrency industries. Therefore, neither genuine innovation nor regulatory noncompliance can be used to evaluate the effectiveness and success of this industry.
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