According to Mick Mulvaney, acting director of the Consumer Financial Protection Bureau, the US government needs to find the proverbial “sweet spot” in its efforts to police the cryptocurrency ecosystem.
In a speech given at the Future of Fintech conference hosted by research and analysis firm CB Insights, Mulvaney argued that regulation is important to protect investors. He noted, however, that the government must not discourage potential investors or developers through onerous laws and regulations.
Mulvaney also said that:
“We knew at an early point in bitcoin that as with any developing financial technology we needed to find that sweet spot … if Mt. Gox became a regular occurrence it dramatically undermines confidence in the markets and prevents innovation. And if we over-regulate and discourage people from entering the marketplace, that has bad consequences too.”
In Mulvaney’s own words, “we’re looking for that Goldilocks [path] in the middle.”
Mulvaney made an effort to explain some of the concerns that might arise from a lack of regulation, saying “It’s a new and innovative technology, it’s a nonbanking system, it’s whatever. If people still can’t get access to their own money, that’s a problem. So the law’s functioning correctly there.”
What he is attempting to do now, he says, is to ensure that existing laws don’t lead to unintended effects in a crypto context.
Mulvaney concluded his speech by saying to his audience:
“If for some reason we’re looking at you and the only way we can look at you is through the lens of the bricks and mortar financial institution, and because we do that it has this perverse or absurd result, that’s what we’re trying to identify and to prevent.”