Biden's administration makes its first steps in launching crypto regulations.
United States President Joe Biden’s administration has released a regulatory framework for cryptocurrencies.
According to the press release shared on September 16th, the framework and policy recommendations outline 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.”
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The new framework summarizes nine separate reports following President Biden’s March 9th Executive Order (EO) on Ensuring Responsible Development of Digital Assets.
Among other things, the fact sheet overviews the work done towards the U.S. central bank’s digital currency (CBDC). The administration claims that they have already formulated the policy objectives for the U.S. CBDC. However, according to the administration, more research needs to be conducted.
For this reason, the U.S. The Treasury, the Office of Science and Technology Policy (OSTP), the Federal Reserve, the National Security Council, and the National Economic Council will research the technological foundation needed for the system.
Moreover, the framework overview ways to control crypto’s energy consumption and its impact on climate and ensure consumer protection. According to the fact sheet, by February 2023, the U.S. Treasury will report on an “illicit finance risk assessment on decentralized finance.” On top of that, federal agencies will “expose and disrupt illicit actors and address the abuse of digital assets.”
The White House also recommends creating an instant payment system like FedNow, which the Federal Reserve plans to launch in 2023.
While some are cheering for a regulatory framework issued by the United States government, others claim that it focuses on the negative aspects of crypto rather than the positives.
The executive director of the U.S.-based Blockchain Association, Kristin Smith, while commenting on the regulatory framework, noted:
Today’s reports and summaries from the Biden administration’s executive order on digital assets are a missed opportunity to cement U.S. crypto leadership. While intended to be part of a broader government and stakeholder effort to bring better regulation to crypto assets, these reports focus on risks — not opportunities — and omit substantive recommendations on how the United States can promote its burgeoning crypto industry.
It is worth noting that one of the reports shared on September 9th by OSTP stated that crypto mining is responsible for around 38% of global energy consumption and therefore affects the climate negatively.
