The White House released a statement on Jan. 27 that provided US President Joe Biden’s administration with a roadmap to mitigate the risks associated with cryptocurrencies. The government’s legislative guidance addressed much of the document to the US Congress.
The authors of the statement outlined a two-pronged path forward. They write:
“We have spent the past year identifying the risks posed by cryptocurrencies and taking action with law enforcement agencies to mitigate them.”
The first element of the roadmap is the “first” comprehensive governance framework for digital asset development, released in September 2022. This document is based on reports commissioned by the Presidential Executive Order to Ensure Responsible Development of Digital Assets issued in March 2022.
Second, executive agencies are stepping up enforcement and issuing new guidelines. According to the statement, government agencies are developing public awareness programs “to help consumers understand the risks of buying cryptocurrencies.” He specifically mentioned banking regulators and encouraged them to continue their efforts. The statement was released on the same day the Fed denied the Digital Asset Custodia Bank membership in the Federal Reserve System.
We will continue to mitigate crypto risks by protecting investors and holding bad actors accountable. We are willing to work with Congress to close regulatory loopholes, but it would be a grave mistake to reverse course and deepen ties between crypto and the financial systemhttps://t.co/qLBetgMG1e
— Brian Deese (@BrianDeeseNEC) January 27, 2023
Specifically, the statement included a wish-list of actions the administration would like to see from Congress, saying:
“Congress must also step up its efforts.”
The White House has a sizable list of responsibilities for lawmakers. His recommendations include expanding the powers of regulators, strengthening disclosure requirements, increasing penalties for misconduct, increasing resources for law enforcement and following the advice in the Financial Stability Oversight Council report mandated by the executive order.
Related: Virginia County plans to put pension funds into DeFi yield farming
The authors also took the opportunity to urge Congress not to do things:
“Legislation should not give a green light to mainstream institutions like pension funds to dive headfirst into cryptocurrency markets.”
They noted that limiting such actions prevented the “cryptocurrency turmoil” from spreading to the broader financial system.
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