The US White House Releases its First Cryptocurrency Policy
- The White House has stayed focused on crafting a policy for the crypto industry.
- The US administration has already taken active steps in its plans to launch a CBDC.
The Biden administration has acknowledged the growth of the crypto market and has released its “First-Ever Comprehensive Framework for Responsible Development of Digital Assets,” which details suggestions made by several agencies after monitoring the industry for six months.
President Biden issued an executive order in March to ensure the progress of digital assets in the country, leading to increased research on the crypto industry and an investigation of the risks and benefits of digital assets.
Like the executive order, the new release does not include new crypto policies. Instead, it offers a clear direction for regulating the industry. The policy model was allegedly drawn from the research work of nine reports and reflects the participation and experience of numerous stakeholders across government, industry, academia, and civil society.
The research work points out several areas of concern and recommends steps that would transform the US into the leading crypto nation. The fact sheet features seven sections titled, “Protecting Consumers, Investors, and Businesses,” “Promoting Access to Safe, Affordable Financial Services,” “Fostering Financial Stability,” “Advancing Responsible Innovation,” “Reinforcing Our Global Financial Leadership and Competitiveness,” “Fighting Illicit Finance,” and “Exploring a U.S. Central Bank Digital Currency (CBDC).”
The framework gives regulators permission to continue coordinating their efforts to enforce the law in the crypto sector and to share information on consumer complaints. Some of these regulators include the Securities and Exchange Commission (SEC) and Commodity Futures Trading Commission (CFTC).
Through data exchange and analysis, the U.S. Treasury will actively engage financial institutions in helping to identify and reduce cyber threats. The agency is expected to collaborate with other regulators to enforce policies.
Federal agencies advise establishing a federal structure for nonbank payment services to increase access to financial services and supporting the use of quick payment solutions like FedNow, whose release is scheduled by the Federal Reserve for 2023.
Additionally, the Office of Science and Technology Policy (OSTP), which recently released a crucial report on the climate impacts of crypto mining, will develop a Digital Assets Research and Development Agenda to help reduce the adverse climate impacts.
The Department of Energy, the Environmental Protection Agency, and other closely-associated organizations will look into keeping closer tabs on the environmental effects of digital assets with the same objective.
The sheet noted that there are opportunities,
to ensure that blockchain technology aligns with “a net-zero emissions economy and improving environmental justice.
The U.S. CBDC was arguably the most significant part of the sheet. The fact sheet revealed that the administration has already created Policy Objectives for a U.S. CBDC system. However, there is a need for more research.