Lael Brainard, vice chairman of the Federal Reserve, has called for rapid regulation of the crypto industry, given the many challenges facing the industry.

According to Brainard, while the crypto-industry is fundamentally different from traditional finance, the sector has proven vulnerable to the same risks and should be subject to the same rules.

These risks include leverage, fire sales, opacity, maturity and liquidity mismatches, and contagion. She explained that new technologies and financial engineering are not sufficient to turn risky assets into safe ones.

“It is important that the foundations for the 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,” Brainard said.

To address the risks associated with the crypto industry, Brainard said, both national and international cooperation is needed to ensure compliance with existing rules and to tailor new rules.

“Future financial resilience will be greatly enhanced if we ensure the regulatory perimeter encompasses the crypto financial system and reflects the principle of same risk, same disclosure, same regulatory outcome,” Brainard said.

The sources for this piece include an article in Reuters.