The White House publishes first framework for crypto regulation

In March, President Joe Biden signed the Executive Order to ensure the responsible development of digital assets, directing the government to study cryptocurrency.

Six months later, following research into the cryptocurrency industry, the White House on Friday published its first-ever comprehensive framework for the responsible development of digital assets that outlined the findings and proposals of several government departments.

The resulting report established no new laws, but provided a clearer picture of how crypto regulation in the US will be handled.

Parts of the framework include “Protecting consumers, investors and businesses”, “Promoting access to safe, affordable financial services”, “Promoting financial stability”, “Promoting responsible innovation”, “Strengthening our global financial leadership and competitiveness”, “Combating Illicit Finance,” and “Exploring a US Central Bank Digital Currency (CBDC).”

The framework allowed regulators to continue to coordinate efforts to enforce the law in the sector and exchange information on consumer complaints. Examples of these regulators were the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC).

Through data sharing and analysis, the US Treasury Department would actively engage financial institutions to help detect and mitigate cyber threats.

To ensure that crypto companies had regulatory guidance, the Treasury was also required to cooperate with regulatory authorities.

Through international institutions such as the Financial Stability Board (FSB) and the Organization for Economic Co-operation and Development (OECD), the Treasury Department would extend this responsibility to US allies.

By the end of February 2023, the Treasury should have concluded its assessment of the risk of illicit financing related to decentralized finance, and by the end of July 2023 it should have completed the evaluation of non-fungible tokens, according to the recommendations.

For the Bank Secrecy Act, rules against tips and laws against unlicensed money transmission to apply specifically to providers of digital asset services – such as digital asset exchanges and NFT platforms – Biden will have to make a decision. Then ask Congress for their thoughts.

According to the fact sheet, there were opportunities to ensure that blockchain technology supports “a net-zero emissions economy and increasing environmental justice.”

The paper added that “the President will consider whether to urge Congress to amend the Bank Secrecy Act, anti-tipping statutes, and anti-unlicensed money transmission laws to apply explicitly to providers of digital assets — including digital asset exchanges and non-functional tokens (NFT) platforms.”

In a clear reference to Bitcoin’s proof-of-work model, the White House Office of Science and Technology Policy stated earlier this month that crypto miners should reduce greenhouse gas emissions and suggested that Congress may consider legislation to “limit or eliminate” high-energy-intensity consensus mechanisms.

The report also referred to “a potential US CBDC” and listed a number of significant potential benefits for technology, economics, security and individual freedom.

Produced in collaboration with Benzinga.

This story was provided to Newsweek by Zenger News.