WASHINGTON—U.S. policy makers should extend investor protections and other financial rules to the cryptocurrency industry before the industry grows too large and begins to pose risks to the financial system, Federal Reserve Vice Chairwoman Lael Brainard said Friday.
While touted as a fundamental break from traditional finance, the crypto financial system turns out to be susceptible to risks “that are all too familiar from traditional finance, such as leverage, settlement, opacity, and maturity and liquidity transformation,” Ms. Brainard said in a speech in London.
