New York Attorney General Letitia James has urged Congress to take decisive action in regulating cryptocurrencies, particularly Bitcoin, to safeguard the U.S. dollar’s dominance in the global financial system. In a recent letter, James emphasized the urgent need for federal oversight to protect investors from rising fraud risks and address the increasing challenge that digital assets, especially Bitcoin, pose to the traditional financial infrastructure.
James voiced concerns about the growing appeal of cryptocurrencies, which are increasingly seen as alternatives to the U.S. dollar, particularly for international transactions. She underscored the risks associated with this shift, noting that digital currencies like Bitcoin could undermine the U.S. dollar’s global supremacy, a sentiment echoed by Larry Fink, CEO of BlackRock, who warned of Bitcoin’s potential as a safe haven against the dollar amidst rising U.S. fiscal challenges.
In her letter, James stressed the importance of creating a robust regulatory framework for digital assets, citing the vulnerabilities that have emerged due to the lack of adequate regulation. She pointed out that without proper oversight, cryptocurrencies are susceptible to manipulation and criminal activity, including funding illicit operations and adversarial regimes.
“Millions of New Yorkers and Americans are involved in cryptocurrency transactions, and they deserve stronger protections to prevent the growing threat of scams and fraud,” James stated.
In addition to Bitcoin, James focused on stablecoins, digital assets pegged to traditional currencies like the U.S. dollar. She called on Congress to introduce regulations requiring stablecoin issuers to establish a U.S. presence and ensure their tokens are backed by U.S. dollars or government securities. Without such safeguards, she warned, these assets are vulnerable to manipulation and fraud, leading to significant financial losses for investors.
James also expressed strong opposition to the inclusion of cryptocurrencies in retirement accounts, such as IRAs, citing the volatility of digital assets as a substantial risk to long-term savings. The unpredictable nature of cryptocurrencies like Bitcoin could jeopardize the financial security of investors, particularly retirees, who rely on stable, long-term investments.
Further, James urged for stricter rules to combat cryptocurrency-related fraud, which has already caused millions of dollars in losses. “The lack of regulation has allowed deceptive schemes to flourish, and stronger federal oversight could prevent many of these scams,” she explained.
Beyond investor protection, James argued that a comprehensive regulatory framework is essential for national security, as the anonymity of cryptocurrency transactions is often exploited by criminals. She called on Congress to require cryptocurrency companies to register with regulatory bodies and adhere to anti-money laundering standards.
As cryptocurrency’s influence grows, Washington is increasingly turning its attention to the issue. In the 2024 election cycle alone, the crypto industry spent over $119 million lobbying for pro-crypto policies. The push for regulation has also gained traction among other political figures, including former President Donald Trump, who has expressed interest in reforming U.S. crypto policies, particularly around stablecoins. Trump’s advisers, including Bo Hines, have outlined plans to pass a stablecoin bill before August, potentially positioning the U.S. as the “crypto capital of the world.”
As debates surrounding cryptocurrency regulation continue, Letitia James’ call for stronger federal action highlights the pressing need for comprehensive oversight to balance the benefits of digital assets with the protection of U.S. financial security.
Related topics:
XRP Leveraged ETF Sets Record at Launch, Surpassing Solana But Faces Competition from Bitcoin
Is a $100 Dogecoin Possible? A Closer Look at Market Realities
Fartcoin Price Pumps 20% While Bitcoin Bleeds – Should You Buy It Instead?
