White House claims “digital assets pose significant risks” after introducing crypto framework

The administration of President Joe Biden is pushing for more control and additional laws over cryptocurrencies as digital assets gain popularity.

The White House hinted at cryptocurrency volatility and the recent downturn that has caused trouble across the cryptocurrency scene in a series of new reports published Friday, September 16, regarding its first-ever framework for regulating cryptocurrencies in the United States.

In particular, the framework describes the ways in which the financial sector can change to facilitate borderless transactions, as well as how to eliminate fraud in the area occupied by digital assets.

According to a statement from the Biden administration:

Digital assets pose significant risks to consumers, investors, and businesses. The prices of these assets can be very volatile: the current global market capitalization of cryptocurrencies is about a third of its peak in November 2021.”

New directives in the framework

The new guidelines build on existing authorities such as the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC). However, no authorizations have yet been issued. However, the long-awaited guidance from Washington has captured 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 cryptocurrency includes a section focused on eliminating criminal activity in the market, and the proposed measures appear to have some real substance.

“The President will assess whether to urge Congress to amend the Bank Secrecy Act, anti-kickback laws, and anti-money transfer laws to specifically apply to digital asset providers — including digital asset exchanges and non-fungible tokens (NFT) platforms). The White House Fact Sheet.

The new reports, among other recommendations, call on financial authorities to crack down on illegal operations and “address existing and emerging risks.”

National Security Adviser Jake Sullivan and National Economic Council Director Brian Dees said in a statement:

“The reports encourage regulators, where they see fit, to expand investigations of wrongdoing in the digital asset market, redouble enforcement efforts and enhance interagency coordination.”

New digital dollar

The framework also notes the potential for “significant benefits” from using a central bank digital currency (CBDC) issued by the US government that can be compared to a digital version of the US dollar.

“The reports encourage the Federal Reserve to continue its research, experimentation, and ongoing assessment in commercial central bank currencies, and call for the creation of an interagency task force led by finance to support the Fed’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 impose unfair, deceptive or abusive practices.” The administration has pushed Congress to give regulators more specific guidance.

In June, Kirsten Gillibrand, D-New York, and Cynthia Loomis, R-Wyoming, proposed creating a regulatory framework for digital assets.

The new instructions come in response to an executive order published in March and signed by President Biden. With this arrangement, the president has asked government agencies to investigate the pros and cons of crypto, then publicly report their findings to promote “responsible development of digital assets.”

A White House post claiming “digital assets pose significant risks” after introducing the crypto framework first appeared on Coinphony.

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