On January 27, the White House released a statement providing the administration of US President Joe Biden with a roadmap to mitigate the risks associated with cryptocurrencies. The administration’s legislative guide directed much of the document to the US Congress.
The authors of the statement outlined a two-pronged path forward. They write: They write:
“We have spent the last year identifying the risks of cryptocurrencies and acting to mitigate them using the authorities that the Executive Branch has.”
The first item on the roadmap is the Administration’s “first” global framework for digital asset development, released in September 2022. This document is based on reports required by the President’s executive order to ensure responsible development. of digital assets, issued in March 2022.
Second, executive agencies are increasing control measures and issuing new guidelines. According to the statement, government agencies are developing public awareness programs “to help consumers understand the risks of buying cryptocurrency.” He mentioned bank regulators in particular and encouraged them to continue their efforts. The statement was issued on the same day that the Federal Reserve denied digital asset bank Custodia Bank entry into the Federal Reserve System.
We’ll keep mitigating crypto risks by protecting investors and holding bad actors accountable. We’re ready to work w/ Congress to address regulatory gaps, but it would be a serious mistake to reverse course and deepen ties btw crypto and the financial system https://t.co/qLBetgMG1e
—Brian Deese (@BrianDeeseNEC) January 27, 2023
In particular, the statement includes a list of actions the administration would like Congress to take:
“Congress, too, must redouble its efforts.”
The White House has a hefty to-do list for lawmakers. Their recommendations include expanding the powers of regulators, strengthening reporting requirements, toughening penalties for misconduct, increasing funding for law enforcement, and monitoring councils listed in the Financial Stability Oversight Board report required by presidential order.
The authors also took the opportunity to urge Congress not to do things their way:
“Legislation should not give conventional institutions, such as pension funds, the green light to jump headlong into cryptocurrency markets.”
They noted that limiting such actions prevented the spread of “crypto turmoil” to the broader financial system.
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