The White House has just released a framework for regulating digital assets

The Alpha:

• In early September 2022, the White House published a report calling for more sustainable practices across the blockchain industry.
• Now the White House has offered solutions in the form of a comprehensive framework centered around “responsible development of digital assets”. This framework outlines the actionable next steps that will be taken, which include things like:
  • Regulators are scaling up investigations into misconduct in the digital asset market, redoubling enforcement efforts on existing rules and regulations, and strengthening interagency coordination.
  • The Financial Literacy Education Commission leads public awareness efforts to help consumers understand the risks associated with digital assets.
  • The Department of Energy, the Environmental Protection Agency and other agencies that track “digital assets’ environmental impacts; develop performance standards as needed; and provide local authorities with tools, resources and expertise to reduce environmental damage.”

Why it matters

When the White House issued an order in March asking all crypto-dependent industries to move toward a more sustainable existence, many individuals in the room were concerned about outright bans. But with the publication of today’s framework, it’s clear that the administration is more interested in sustainable growth than banning specific tools or technologies.

What will be next

Aside from the actionable next steps already mentioned, various government agencies are tasked with conducting additional research to minimize the ecological, economic and cybersecurity risks associated with blockchain technology and related digital asset industries.

Specifically, the Office of Science and Technology Policy and the National Science Foundation will develop a “Digital Assets Research and Development Agenda” to kick-start research on topics spanning next-generation cryptography, transaction programmability, cybersecurity, privacy protection, and how to reduce the environmental impact of digital assets .

Apart from that, part of the framework encourages all the authorities to work together to ensure that the digital asset industry grows in the right – i.e. sustainable – way.

Further reading:

White House to NFT Space: Make Minting Greener
Art or investment? The US government’s new policy on NFTs