According to allegations that were made public on Friday, the Biden administration has said that the US government agencies need to increase their enforcement efforts in the digital asset industry and uncover loopholes in cryptocurrency legislation.
Even though the White House did not express support for a digital dollar, the Treasury Department will head up a committee of government departments that will investigate the possibility of a central bank issuing its digital currency. In response to an executive order that US Vice President Joe Biden signed earlier this year “on Ensuring Responsible Development of Digital Assets,” these reports have been compiled.
What was the purpose of the report?
The reports urged regulators such as the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC) to release guidelines and regulations for potential consequences associated with the digital asset ecosystem. These risks include the possibility that cryptocurrencies could be used in illegal activities such as money laundering or fraud.
The White House also said that Vice President Joe Biden will explore whether or not to seek Congress to alter the Bank Secrecy Act (BSA) to apply to digital asset service providers. These service providers include cryptocurrency exchanges and platforms for non-fungible tokens, or NFTs. The BSA mandates that financial institutions disclose any transactions they deem to be suspicious to the Treasury.
Other steps were taken by the government
In addition to this, Biden will review the suggestions that agencies make for the establishment of a government framework to supervise non-bank payment providers. The value of cryptocurrencies soared beyond $3 trillion last year, but the industry has struggled in recent months as investors have withdrawn out of riskier assets owing to increasing interest rates.
This has led to a decline in the value of cryptocurrencies. Without the appropriate level of control, cryptocurrencies pose a threat to both the country’s financial stability and its national security, according to Brian Deese, head of the National Economic Council. If digital assets are going to play the role that the government thinks it can in stimulating innovation and boosting economic and technical competitiveness, then regulation of cryptocurrencies is required.
The report is a summary
According to a series of stories that were released on Friday, the administration of Vice President Joe Biden is reportedly pushing for further regulation of cryptocurrencies and wants agencies to step up their enforcement efforts against digital asset enterprises that cause damage to consumers. Both the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC) are urged by the administration to “aggressively pursue investigations and enforcement actions against illegal acts in the digital assets area” in the reports.
The findings also recommend that the Consumer Financial Protection Bureau (CFPB) and the Federal Trade Commission “redouble their efforts” to monitor consumer complaints and detect abusive activities in the industry. These recommendations can be found in both of the reports. The ramifications of a central bank digital currency (CBDC) will be studied by an interagency committee, and the Treasury Department will serve as the group’s leader, according to a recent announcement.
The new framework is a response to an executive order that Vice President Biden issued in March. In that order, he requested that government departments investigate the threats and opportunities involved with the rapidly developing cryptocurrency industry.
Final Thoughts
According to a fact sheet provided by the White House, one of the many objectives that were listed in the report is that the White House is contemplating whether or not to call on Congress to alter the Bank Secrecy Act (BSA) and prohibitions against unlicensed money transmission to apply expressly to digital asset service providers, digital asset exchanges, and nonfungible token (NFT) platforms. According to the White House, the United States Department of the Treasury will finish an illicit finance risk assessment on decentralized finance by the end of February 2023, and an evaluation on non-fungible tokens will be finished by July 2023. According to the White House, Vice President Biden is also taking into consideration agency proposals to build a federal framework to regulate nonbank payment providers.
