- The Biden administration praised its comprehensive framework and urged lawmakers and authorities to crack down on cryptocurrency.
- Executive agencies are publishing new guidelines, and enforcement is being stepped up.
The White House provided the administration of US President Joe Biden with a strategy for lowering the risks associated with cryptocurrencies in a statement on January 27. Much of the legislative advice provided by the administration was directed at the US Congress. The statement’s authors presented a two-pronged strategy for moving forward. They mentioned:
“We have spent the past year identifying the risks of cryptocurrencies and acting to mitigate them using the authorities that the Executive Branch has.”
The administration’s “first-ever” comprehensive framework for developing digital assets, published in September 2022, is the initial component of the road map. Based on reports required by the president’s executive order to ensure the responsible development of digital assets, released in March 2022, that paper was created.
Second, executive agencies are publishing new instructions and stepping up enforcement. Governmental organizations are allegedly creating public awareness campaigns to educate people about the dangers of purchasing cryptocurrency. It specifically named bank regulators and urged them to keep up their efforts. The announcement was made the same day that the Federal Reserve rejected Custodia Bank’s application to join the Federal Reserve System.
The White House has a lengthy list of responsibilities for lawmakers. Among its recommendations are to give regulators more authority, to make disclosure requirements more stringent, to stiffen the penalties for misconduct, to fund law enforcement more heavily, and to heed the counsel contained in the executive order’s required report from the Financial Stability Oversight Council. The authors also used the occasion to implore Congress to refrain from taking specific actions:
“Legislation should not greenlight mainstream institutions, like pension funds, to dive headlong into cryptocurrency markets.”
The article urged implementing measures to guarantee that newly developed blockchain technologies are safe and helpful to all of society and that the new digital economy benefits everyone, not just a privileged few. The authors stated that to achieve these aims and put the necessary protections in place, they will continue to advance the digital-assets architecture they have built.
Additionally, they pointed out that restricting such behavior stopped the volatility in cryptocurrencies from spreading to the more extensive financial system.