U.S. President Joe Biden.
The Biden administration on Friday unveiled its first framework on managing digital assets in the U.S., offering recommendations on how to support the use of cryptocurrencies while also reducing fraud in the space.
The framework comes after President Joe Biden signed an executive order in March outlining a national strategy for oversight of the cryptocurrency industry. This included calling on federal agencies to advance the executive order’s six key priorities: 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.
The Treasury Department published three reports Friday on the issue, as requested by the president, who received nine reports in total, according to a White House fact sheet.
The reports encourage regulators like the SEC and Commodity Futures Trading Commission to investigate and enforce actions against unlawful, abusive or deceptive practices in the digital assets space. “Regulatory and law enforcement agencies are also urged to collaborate to address acute digital assets risks facing consumers, investors, and businesses,” the fact sheet states.
Congress has weighed in on crypto regulation as well, though a consensus is yet to be reached. CFTC Chairman Rostin Behnam said Thursday he is supportive of legislation in the Senate Agriculture Committee that would allow the agency to oversee digital commodities. Meanwhile, SEC Chairman Gary Gensler told the Senate Banking Committee that the majority of cryptocurrencies are securities and should fall under jurisdiction of the SEC.
In an effort to fight illicit finance such as money laundering and terrorist funding, the President is also considering calling upon Congress to update the Bank Secrecy Act, the fact sheet states.
Aside from fighting bad actors, Mr. Biden’s framework calls for the Office of Science and Technology Policy and the National Science Foundation to develop a digital assets research and development agenda that will research topics such as transaction programmability, cybersecurity and privacy, next-generation cryptography and ways to mitigate crypto’s impact on climate change.
Just last week, the OSTP published a report revealing the environmental impacts of crypto mining and recommending that agencies such as the Environmental Protection Agency get involved in decreasing crypto’s energy use.
The framework encourages the Federal Reserve to continue its research on a central bank digital currency, which “could enable a payment system that is more efficient, provides a foundation for further technological innovation, facilitates faster cross-border transactions, and is environmentally sustainable,” according to the fact sheet.
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