The US government is continuing its regulatory efforts regarding both banks and artificial intelligence following recent events. In a March 30 press briefing, White House press secretary Karine Jean-Pierre announced that the President had ordered banking agencies to consider a series of reforms in order to reduce or eliminate the risk of future banking crisis. These reforms include stricter liquidity and capital requirements, more rigorous stress tests, living wills and enhanced bank supervision, obviously moving away from the relaxed regulation previously in place.

The issues with the traditional financial system are often linked to its fractional reserve banking practice. In this model, banks keep only a portion of their customers’ deposits as cash while lending out the rest, so if the trust of public in the government which issues it decreases, it can have disastrous results, as seen recently with the US banking crisis. This is even worse if a country brings up a fiat currency as this has limits in terms of issuance.

In this context, when talking about the concept of cryptocurrency, numerous experts say Bitcoin (BTC), the world’s first decentralized digital currency, could potentially solve those issues. This is because it is not based on a centralized authority, which could become a point of failure for corruption. Bitcoin also has a finite supply, so its inflation is limited; because of its decentralized nature, no single authority can manipulate the money supply or control its use. All of this would be beneficial to reduce the chance of systemic failures and to help maintain a stable market.

At the same time, Jean-Pierre also addressed the worries of 1,000 of the leading artificial intelligence specialists in regards to the potential threats AI poses to living beings and the environment. The call was for a regulation AI to ensure its safe and responsible development, and the White House is taking those concerns into account through the AI Bill of Rights that was passed last October. The ultimate goal is to make sure AI advances in a secure and prudent manner, while still acknowledging its potential to affect human jobs and society.

The combination of financial reforms and further regulations regarding AI development demonstrates the US government’s commitment to protecting the global market from systemic failures and the potential harms of new technological advances. It is yet to be seen if the rearrangements will actually take place but the steps being taken in the tackling of both issues are a hopeful sign for the near future.



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