Central Bank Think Tank Warns Against Repressive Crypto Regulation

President of US-based think tank stresses importance of investor protection, but also need to allow evolving technologies to thrive

article-image

Source: Shutterstock / f11photo, modified by Blockworks

share

Crypto regulation should be executed in a manner that does not choke the industry and suppress revolutionary ideas, according to an independent think tank for central banking and economic policy.

Patricia Haas Cleveland, US president of the Official Monetary and Financial Institutions Forum (OMFIF), wrote in a blog published Monday that the fallout from FTX’s implosion has laid the foundation for greater regulatory clarity, but warned this push should be approached carefully.

“The real story in the wake of FTX is less about cryptocurrencies than advances in the underlying blockchain and other technologies,” Haas wrote. “These are quietly creating transformational tools and applications that will help propel Web3 and reshape the financial industry.”

Haas Cleveland, a New York-based banker, has held senior roles in various financial institutions including the US Treasury, the European Bank for Reconstruction and Development and Citigroup. She’s also worked as a financial advisor to the Asian Infrastructure Investment Bank and advised early-stage tech startups. 

She noted the SEC’s record enforcement actions against crypto participants in 2022, a report on stablecoins from the President’s working group and a congressional subcommittee on digital assets as indicators of a clampdown on the industry. 

Her note included a cautionary message to regulators, warning that tech advances are playing out in both the decentralized finance (DeFi) and traditional financial realms where distributed ledger technology is being utilized to make processes and payments more efficient. 

HSBC and Goldman Sachs’ use of blockchain to enable settlements and custody of digital assets were mentioned as examples of good use cases.

Concerns about regulation stifling the crypto industry were among the topics discussed at the OMFIF roundtable in Washington held on Jan. 23. Timothy Massad, chairman of the Commodities Futures Trading Commission under President Barack Obama, and Lee Brenner, head of public policy for digital assets at Goldman Sachs, were among the speakers present at the discussion.

Haas Cleveland noted that the restraints of scalability and accessibility will be addressed and new possibilities will emerge, allowing open-source blockchains to gain from improved data privacy, speed and lower costs.

“Ensuring the guardrails for investor protection and financial stability are in place is important, but it is equally important to allow development and evolving technologies to thrive. Without that, we miss out on improvements to financial products, services and inclusion, as well as opportunities for risk mitigation,” she said.

“Greater regulatory action may be called for, but regulators must not stifle innovation.”


Start your day with top crypto insights from David Canellis and Katherine Ross. Subscribe to the Empire newsletter.

Explore the growing intersection between crypto, macroeconomics, policy and finance with Ben Strack, Casey Wagner and Felix Jauvin. Subscribe to the Forward Guidance newsletter.

Get alpha directly in your inbox with the 0xResearch newsletter — market highlights, charts, degen trade ideas, governance updates, and more.

The Lightspeed newsletter is all things Solana, in your inbox, every day. Subscribe to daily Solana news from Jack Kubinec and Jeff Albus.

Tags

Upcoming Events

Javits Center North | 445 11th Ave

Tues - Thurs, March 18 - 20, 2025

Blockworks’ Digital Asset Summit (DAS) will feature conversations between the builders, allocators, and legislators who will shape the trajectory of the digital asset ecosystem in the US and abroad.

Brooklyn, NY

TUES - THURS, JUNE 24 - 26, 2025

Permissionless IV serves as the definitive gathering for crypto’s technical founders, developers, and builders to come together and create the future.If you’re ready to shape the future of crypto, Permissionless IV is where it happens.

recent research

LTIPPanalysis.png

Research

This report is a retroactive analysis of Arbitrum's Long Term Incentives Pilot Program (LTIPP). We collect relevant data at a protocol level and review bi-weekly updates to analyze recipients, their strategies, and the impact of the incentives on high level growth metrics. In particular, we want to highlight outperformers and underperformers, and glean any best practices or lessons learned for protocols distributing ARB incentives in the future. The overarching goal is to synthesize lessons learned that the DAO can reference as it begins thinking about future incentives programs–namely, the working group for incentives that is being actively discussed–especially as Timeboost introduces new conditions for trading and economic activity.

article-image

While acknowledging potential headwinds for risk assets, Galaxy’s Alex Thorn notes there are also plenty of catalysts

article-image

BuilderNet is a new block building network designed to return more MEV and gas fees to users

article-image

Ledn’s John Glover gives some price targets to watch for bitcoin

article-image

Sponsored

AI project Zerebro intersects the spheres of artificial intelligence, finance, art, music, and culture

article-image

Allmight is focused on furthering the United States’ leadership in crypto

article-image

The conditions Charles Schwab is waiting for before jumping headfirst into crypto could take shape soon