The White House released the first crypto framework on Friday, focusing on the key areas of the cryptocurrency space where the Biden Administration wants to focus its attention. The action follows President Biden’s March executive order on “Ensuring Responsible Development of Digital Assets.”
In a series of new reports issued on Friday, September 16, regarding its first-ever framework for crypto regulation in the United States, the White House alluded to the volatility of cryptocurrencies and a recent decline that has led to problems throughout the crypto landscape.
The framework describes how the financial services sector could change to make borderless transactions easier, as well as how to combat fraud in the area occupied by digital assets. According to the report:
“The reports encourage regulators, as they deem appropriate, to scale up investigations into digital asset market misconduct, redouble their enforcement efforts, and strengthen interagency coordination. To accomplish all the above steps, the reports call for continued engagement with allies and partners on these issues, which will reinforce U.S. technological and financial leadership globally.”
A White House statement explained how multiple government agencies had joined forces to oversee the growth of the digital assets space, with a focus on seven primary goals: protecting consumers and businesses, promoting access to financial services, fostering financial stability, supporting innovation, maintaining the country’s position as a financial leader, combating financial crime, and exploring the possibility of a digital dollar. The White House explained how it would achieve each of its goals in the statement.
The new guidelines are based on existing regulatory bodies such as the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC). However, no mandates have yet been issued. However, Washington’s long-awaited guidance has piqued the interest of both the crypto sector as a whole and investors in this new asset class.
The White House’s new framework for regulating cryptocurrencies includes a section aimed at eliminating criminal activity in the market, and the proposed measures appear to have some substance.
“The President will evaluate whether to call upon Congress to amend the Bank Secrecy Act, anti-tip-off statutes, and laws against unlicensed money transmitting to apply explicitly to digital asset service providers — including digital asset exchanges and nonfungible token (NFT) platforms.”
The framework also mentions the possibility of significant benefits from using a central bank digital currency (CBDC) issued by the US government that is equivalent to a digital version of the US dollar.
“The reports encourage the Federal Reserve to continue its ongoing CBDC research, experimentation, and evaluation and call for the creation of a Treasury-led interagency working group to support the Federal Reserve’s efforts.”
The new guidelines are in response to an executive order issued by President Biden in March. The President requested in that order that government agencies investigate the benefits and drawbacks of cryptocurrency and then publish public reports on their findings to promote the responsible development of digital assets.
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