The White House, on Friday, September 16, unveiled a new plan for regulating digital assets such as cryptocurrencies. Increased oversight is part of the plan, as is research into the possibility of creating a digital U.S. dollar. This is the Biden administration’s most significant effort yet to develop a policy to regulate cryptocurrency assets.
In a statement, National Economic Council Director Brian Deese and National Security Advisor Jake Sullivan said that the framework aims to position the United States to play a “leading role in the innovation and governance of the digital assets ecosystem at home and abroad, in a way that protects consumers, is consistent with our democratic values, and advances U.S. global competitiveness.”
The Treasury Department will work closely with financial institutions to identify and fix cyber vulnerabilities, while other federal agencies such as the EPA and the Department of Energy will investigate how digital assets such as cryptocurrencies affect the environment.
In March, President Biden signed an executive order directing different federal departments to investigate the risks and prospects of digital assets such as cryptocurrency and provide reports based on their findings.
After two years of exponential growth, 2022 has been a turbulent year for cryptocurrencies, with popular token prices plummeting to less than a third of their all-time highs. The crash of the algorithmic stablecoin TerraUSD in May also triggered a crypto market-wide crisis.
To prohibit the use of cryptocurrency for money laundering and terrorist financing, President Joe Biden may propose expanding the Bank Secrecy Act (BSA) to encompass cryptocurrencies and non-fungible tokens (NFTs).
The Treasury Department is also conducting an “illicit financing risk assessment” on DeFi platforms, as well as a separate one on NFTs, both of which are expected to be completed by February and July 2023, respectively.
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