President Joe Biden’s administration is lobbying for more control and further laws on cryptocurrencies when digital assets are gaining popularity.
The White House alluded to the volatility of cryptocurrencies and a recent decline that has led to problems throughout the crypto landscape in a series of new reports issued on Friday, September 16, regarding its first-ever framework for crypto regulation in the United States.
Notably, the framework describes the methods in which the financial services sector could change to make borderless transactions more straightforward, as well as how to clamp down on fraud in the area occupied by digital assets.
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According to a statement made by the Biden administration:
“Digital assets pose meaningful risks for consumers, investors, and businesses. Prices of these assets can be highly volatile: the current global market capitalization of cryptocurrencies is approximately one-third of its November 2021 peak.”
The new directives in the framework
The new guidelines rely on existing authorities such as the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC). However, no mandates have been issued as of yet. However, the long-awaited guidance from Washington has captivated 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 part that focuses on eliminating criminal activities in the market, and the measures that have been suggested look to have some real substance to them.
“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,” according to a White House fact sheet.
The new reports, among other recommendations, demand for financial authorities to tighten down on illegal operations and to “address current and emergent risks.”
National security adviser Jake Sullivan and Brian Deese, director of the National Economic Council, said in a statement:
“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.”
New digital dollar
The framework also refers to the possibility of “significant benefits” from using a central bank digital currency (CBDC) issued by the United States government comparable to a digital version of the United States 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.”
In addition, the administration recommends that the Consumer Financial Protection Bureau and the Federal Trade Commission “redouble their efforts to monitor consumer complaints and to enforce against unfair, deceptive, or abusive practices.” The administration has been pushing Congress to provide regulators with more specific direction.
In June, Kirsten Gillibrand, a Democrat for New York, and Cynthia Lummis, a Republican for Wyoming, presented a proposal to establish a regulatory framework for digital assets.
The new instructions are in response to an executive order published in March and signed by President Biden. In that order, the President requested that government agencies investigate the advantages and disadvantages of crypto and then publish public reports on their findings to promote the “responsible development of digital assets.”