KEY POINTS
  • Federal Reserve Vice Chair Lael Brainard said Friday that regulation is needed or the industry could become a wider danger to the financial system.
  • The lack of regulation guidelines has been a confusing and troublesome issue for the crypto industry.
  • Despite this year's crash in the price of bitcoin, U.S. regulators continue to call attention to the industry's potential, growth and reach, as well as the potential consequences of not having a clear framework for it.
Lael Brainard, governor of the U.S. Federal Reserve, speaks during the National Association of Business Economics (NABE) annual meeting in Arlington, Virginia, on Monday, Sept. 27, 2021.

Federal Reserve Vice Chair Lael Brainard became the latest official to speak out on crypto, saying Friday that regulation is needed or the industry could become a wider danger.

"Innovation has the potential to make financial services faster, cheaper and more inclusive, and to do so in ways that are native to the digital ecosystem," she said in a speech at a Bank of England conference in London. "It is important that the foundations for sound regulation of the crypto financial system be established now before the crypto ecosystem becomes so large or interconnected that it might pose risks to the stability of the broader financial system."