The report said: “Digital assets present potential opportunities to reinforce U.S. leadership in the global financial system and remain at the technological frontier. But they also pose real risks as evidenced by recent events in crypto markets.”
President Biden’s administration has released the first-ever framework for crypto regulation in the United States. The report outlines how the financial services sector should develop to facilitate borderless transactions and how to combat fraud in the digital asset market.
The framework was created in response to President Biden's executive order in March, which urged federal agencies to investigate the risks and benefits of cryptocurrencies and publish official reports on their findings.
Government agencies have been working to create their own frameworks and policy recommendations for the past six months to address the 6-key priorities listed in the executive order.
These include 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. Suggestions on these subjects make up the released framework.
The directives in the framework permit regulators to continue coordinating their efforts to enforce the law in the sector and to share information on consumer complaints.
While noting the potential benefits associated with cryptocurrencies, the reports pointed out the actual risk, especially with recent market events, including the May crash of the “so-called stablecoin.”
According to the reports:
“Digital assets present potential opportunities to reinforce U.S. leadership in the global financial system and remain at the technological frontier. But they also pose real risks as evidenced by recent events in crypto markets.”
The reports call for innovation by launching research and development, as well as “measures to mitigate the downside risks, like increased enforcement of existing laws and the creation of commonsense efficiency standards for cryptocurrency mining.”
The report also hints at a possible U.S. CBDC and lists numerous significant potential advantages in technology, the economy, security, and individual liberty. However, efforts in this direction are limited to a set of policy goals that reflects the government’s priorities for a U.S. CBDC.
Additionally, the Treasury will take the lead in an interagency working group to examine the potential implications of a U.S. CBDC. It will leverage technical expertise across the government and share information with partners.
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