White House Unveils First-Ever Framework on Digital Assets Regulation
The White House published its first-ever framework on crypto regulation, which explores how should the U.S. financial services industry develop to facilitate borderless transactions while minimizing fraud in the crypto space. The framework comes six months after U.S. President Biden urged government agencies to review the risks and advantages of digital assets and report their findings.
U.S. Government Agencies Develop the First Crypto Regulation Framework After Six Months of Research
The White House released a framework for U.S. crypto regulation, the first of its kind, six months after U.S. President Joe Biden tapped federal agencies to evaluate the advantages and disadvantages of crypto assets. The framework explores ways “in which the financial services industry should evolve to make borderless transactions easier, and how to crack down on fraud in the digital asset space,” according to CNBC.
“The new directives tap the muscle of existing regulators such as the Securities and Exchange Commission and the Commodity Futures Trading Commission, but nobody’s mandating anything yet.”Biden White House just put out a framework on regulating crypto — here’s what’s in it
The move comes after Biden signed an executive order in March, urging government agencies to examine the potential risks and benefits of cryptocurrencies and report their findings. For the past several months, the agencies have been working on their own frameworks and regulatory recommendations to address the key points named in the executive order.
These points included “consumer and investor protection; promoting financial stability; countering illicit finance; U.S. leadership in the global financial system and economic competitiveness; financial inclusion; and responsible innovation.” Combined, the agencies’ recommendations make up the first-ever White House attempt to regulate the digital asset space.
The new directives are set to make the U.S. a leader in terms of management and regulation of crypto assets, both locally and abroad, said Brian Deese, Director of the National Economic Council, and National Security Advisor Jake Sullivan.
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Cracking Down on Fraud and Exploring the CBDC Benefits
A portion of the new framework focuses on minimizing the number of fraudulent activities in the crypto industry. The White House fact sheet shows that the President is considering urging Congress to make amendments to the “Bank Secrecy Act, anti-tip-off statutes, and laws against unlicensed money transmitting to apply explicitly to digital asset service providers.” These include both crypto exchanges and NFT marketplaces.
On the other hand, the framework also focuses on the potential advantages of a U.S. central bank digital currency (CBDC). In other words, a CBDC would be a digital version of the U.S. dollar – centralized, completely regulated, and backed by the Federal Reserve.
The new guidelines come amid a critical period for the crypto industry, which has witnessed a notable surge in fraudulent activities lately. Last month, the U.S. Department of the Treasury sanctioned the crypto mixer Tornado Cash, which has been used to launder roughly $7 billion worth of crypto since 2019.
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