Biden Administration To Create Cryptocurrency Legal Framework Soon

by | Feb 6, 2023 | Market News | 0 comments

The implosion of LUNA/Terra and the accompanying catastrophic industry-wide spread that led to several bankruptcies are mentioned first in the road map. As part of this effort, the administration’s top minds have devised a plan to ensure the secure and responsible growth of digital assets while mitigating the threats they present, as outlined in the roadmap. To paraphrase, “many everyday shareholders who trusted bitcoin businesses young people and minorities serious losses,” but “thankfully, the tumult in the crypto market has had a minimal detrimental effect on the sound fiscal system to date.” This statement refers to the FTX bankruptcy. According to the plan, the Administration will prioritize protecting shareholders and keeping bad actors accountable to make sure cryptocurrencies do not threaten financial stability.

The Cryptographic Framework, Released by the White House

On Friday, the White House released the first-ever crypto framework, which lays out where the Biden administration plans to devote its time and energy in the cryptocurrency sector. In March, Vice President Joe Biden issued an executive order titled “Ensuring Sustainable Utilization of Digital Assets,” and this document is a response to that order. The United States government is making the changes necessary to strengthen its position as a regulator of the digital assets business. Together, NEC Head Brian Deese and National Security Adviser Jake Sullivan are “setting the framework for a strategic, holistic approach to reducing the acute threats of digital assets and—where proven—harnessing their benefits,” as they put it in a joint statement.

The White House released a statement outlining how numerous government agencies had collaborated to supervise the growth of the electronic resources space with the following seven objectives in mind: consumer and business protection, broadening access to financing, ensuring financial stability, encouraging innovation, preserving the United States’ position as a global financial leader, combating financial crime, and investigating the viability of a digital dollar.

To ensure the safety of both customers and companies

The Trump administration has warned about the dangers of cryptocurrency, including price instability and fraud. “aggressively pursue inquiries and enforcement mechanisms against unlawful practices in the digital assets market,” the statement urged the SEC and CFTC to do. The SEC has been keeping a close eye on the cryptocurrency market, with agency chair Gary Gensler reaffirming this week that he thinks most data and applications should be categorized as securities. Neither the SEC nor the CFTC has complete jurisdiction over the industry at present time.

Fostering Ease of Use of Financial Resources

The White House has stated that the government should prioritize “promoting the development and adoption of cutting-edge technologies by payment providers” to ensure that everyone has equal access to the digital economy. In addition, Vice President Biden may institute a system to oversee alternative financial service providers. To this end, the government has pledged to “align global payments practices, legislation, and supervisory protocols, while investigating plurilateral systems that combine immediate payment systems” to boost the effectiveness of cross-border transactions.

Promotes Financial Security

Stable coins were also mentioned in the statement, which warned of “spillover effects” and “disruptive runs” resulting from the combination of digital assets with conventional financial services. The “potential for instability” was justified by pointing to the failure of Terra’s UST. Janet Yellen, the United States Secretary of the Treasury, also addressed the collapse of UST in the days following its occurrence in May, saying that the experience demonstrated the necessity for stable coin regulation.

Aiding Creativity

The government’s stated goal of encouraging innovation was accompanied by a list of concrete measures to keep the United States competitive in the lightning-fast crypto industry. Research on cryptography, “transaction programmability” (probably referring to smart contracts operating on blockchain systems like Ethereum), information security, personal privacy, and whether digital asset solutions were all mentioned as areas of focus for the Office of Science and Technology Policy and the National Science Foundation. At long last, the Commerce Department will convene a group of government agencies, academics, and industry leaders to examine possible crypto regulation.

Maintaining U.S. Leadership in International Finance

The administration at 1600 Pennsylvania Avenue reaffirmed its commitment to preserving the United State’s status as the world’s financial powerhouse. According to the statement, “the United States is actively working with its partners to spell out [digital asset] regulations consistent with our goals and principles,” all while further solidifying America’s place at the head of the international monetary system.

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