Biden’s anemic crypto framework offered nothing new
The long-awaited cryptocurrency regulatory framework released by President Joe Biden’s Treasury Department this month sought to outline a plan to manage the burgeoning crypto industry. Unfortunately, the Department’s assessment failed to embody more substance than a mere statement of objectives.
While Biden’s administration appears to be taking a “whole of government approach” to overseeing the decentralized finance (DeFi) sector and its ripple effects on the traditional economy, they focus mainly on defending against negative events – such as financial crime – and neglect facilitating positive events such as the wealth building opportunities that crypto offers to Americans excluded from the traditional big banking system.
The new framework was a follow-up to Biden’s order from March, titled “Ensure Responsible Development of Digital Assets.” Officials focused mainly on prosecuting money launderers and Ponzi schemes across jurisdictions. That may come as no surprise, considering it was developed as crypto dominoes fell during the summer months. These included the collapse of Terraform Labs, which led to an Interpol arrest warrant for its founder, Do Kwon; Celsius Networks Bankruptcy; and the collapse of crypto prices.
Nonetheless, these events served the healthy purpose of shaking out bad actors who were in crypto for criminal or self-interested purposes. An effective set of crypto-related laws that prevent illegal activity and promote peer-to-peer financial transactions will do wonders for crypto’s public image. The Biden framework, which is more reactive than proactive, does not achieve that.
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As a nation, we agree on little these days. We mostly want the United States to remain a global economic superpower, but we disagree on how to do that. Stablecoins and other cryptocurrencies dismantle the power of federal currencies and allow individuals to accumulate wealth independently, which is precisely why the federal government does not like them.
The Biden frame literature suggests that digital currency is key to securing America’s future as an economic leader. But if it gives power over crypto to the same authorities that have power over traditional finance, the status quo is not going to change. Instead of establishing the US dollar’s “digital twin”, the government would be better off finding a way to coexist with alternative currencies.
The White House’s proposed framework is a damn shame.
– Clear attack on proof-of-work by suggesting they will set environmental standards for mining.
– Pushes FedNow over crypto
– Promote anything as a potential scam or threat
– Harping on volatility and consumer risk— The Wolf Of All Streets (@scottmelker) 16 September 2022
It is time to move beyond the enforcement of existing regulations and to initiate new programs that integrate blockchain technology into areas most in need of disruption, such as healthcare and big business, even if we cannot fully agree on how to handle currencies.
For example, keeping medical records on a blockchain – as Estonia’s highly advanced e-health system already does – would streamline and secure each person’s health data from birth to death, with each doctor or pharmacy along the way accessing an accurate history to do so best decision. Collection of anonymised, uncorrupted medical data will lead to better research, better treatments and more cost-effective healthcare.
Related: Cryptocurrency is taking off as an instrument of tyranny
Likewise, putting real estate and business records on a blockchain will lead to more accountability for large, opaque companies that make bold claims about charity and sustainability. Such transparency will allow consumers to make more informed decisions about who they buy from – and bank with.
The federal government should also nurture blockchain technology by investing in large blockchain projects and incentivizing companies that use it to better serve the public.
Going forward, let’s hope that both federal and state governments will work together to write real crypto industry legislation, not just to mitigate the damage, but to advance the potential. Cryptocurrencies and other digital assets have the capacity to bring wealth-building opportunities to vast numbers of unbanked Americans, break up monopolies, and hold wealthy Goliaths accountable for their business dealings to a degree never seen before. The Biden framework is a tepid start, but we have a long way to go.
Guy Gotslak is the president and founder of the CryptoIRA platform My Digital Money. He holds a degree in computer science and engineering from UCLA and an MBA from Northwestern University.
This article is for general information purposes and is not intended to be and should not be taken as legal or investment advice. The views, thoughts and opinions expressed herein are those of the author alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.
