Bank of America voices increased urgency for regulation; USDC issuer Circle axes plan to go public
- Bank of America's research report stated that the cost of ignoring cryptocurrencies is high, given their growth over the years.
- The report also read that regulation might increase the participation of institutional investors.
- Circle and Concord terminated their proposed business combination, which was initiated in July 2021.
Bank of America reiterated its stance on the crypto market following the collapse of FTX. The bank has been vocal about the fact that the digital asset space should be regulated and continues to believe in the same. However, hindrances from the regulatory authorities also remain a concern for crypto players, the example of which can be seen in the case of stablecoin issuer Circle.
Bank of America wants regulation
Bank of America, in a research report published on Friday, discussed the impact of FTX's fallout on the crypto market. It stated that while the blow was devastating, it reaffirmed the need for stricter enforcement of rules and regulations. The report read,
"An increased urgency for regulation may enable greater institutional engagement, and a shift in focus (and capital) from speculative trading to projects with real-world functionality and companies with road maps to profitability may accelerate industry maturity."
According to the Bank of America, the cost of ignoring cryptocurrencies and blockchains would be very high. This is because, despite the top 100 cryptocurrencies declining by 64% year-to-date, their value since 2016 exploded by over 2,100%.
At the same time, Decentralized Applications (Dapps) with real-world implications have also noted a significant increase this year. Thus as per the Bank of America, a transparent legal framework would foster technological innovation, provide consumer and investor protection and mitigates financial stability risks as well.
Earlier this month, the Commodity Futures Trading Commission's Chairman Rostin Behnam also demanded broader authority over crypto exchanges. Behnam suggested revisiting Digital Commodities Consumer Protection Act (DCCPA) bill to ensure there are no gaps or holes in it.
Circle steps back
Circle, which is known to issue the stablecoin USD Coin (USDC), scrapped its deal and ended plans to go public. The company announced that its proposed business partnership with Concord Acquisition Corp, a publicly traded special purpose acquisition company (SPAC), had been terminated.
As stated by the CEO of Circle, Jeremey Allaire, the reason behind the termination of the deal was the failure to complete Securities and Exchange Commission (SEC) qualification in time. Although he backed up the SEC by tweeting,
2/ From my perspective, I believe that the SEC has been rigorous and thorough in understanding our business and many novel aspects of this industry. This kind of review is necessary to ultimately provide trust, transparency and accountability for major companies in crypto.
— Jeremy Allaire (@jerallaire) December 5, 2022
Although Allaire did not reveal whether Circle will take another run at going public, he reinstated the company's focus on "bringing forward the vision of open, more inclusive and more efficient global financial system."
Author
Aaryamann Shrivastava
FXStreet
Aaryamann Shrivastava is a Cryptocurrency journalist and market analyst with over 1,000 articles under his name. Graduated with an Honours in Journalism, he has been part of the crypto industry for more than a year now.
