White House Launches ‘Comprehensive Framework’ for Crypto Regulation and Development

The White House today released a “First-Ever Comprehensive framework for Responsible Development of Digital Assets” outlining the conclusions and recommendations of various federal agencies after six months of studying the crypto industry.

The directive to research crypto was given in President Biden’s verdict, signed in March this year. Like the executive order, today’s “Comprehensive Framework” does not establish any new legislation, but it does provide a clearer vision of US crypto regulation.

The new framework builds on research from nine reports sent to the president since the commission, and claims to reflect “input and expertise from various stakeholders across government, industry, academia and civil society”.

Their concerns are wide-ranging, and their recommendations not only include the obvious (such as consumer protection, the environment, and national security), but go one step further to consolidate America’s role as a global crypto frontrunner by encouraging private sector innovation and collaboration. – operation at an international level.

The framework is divided into sections titled “Protecting consumers, investors and businesses,” “Promoting access to safe, affordable financial services,” “Advancing financial stability,” “Advancing responsible innovation,” “Strengthening our global financial leadership and competitiveness,” “Combating Illicit Finance,” and “Exploring a US Central Bank Digital Currency (CBDC).”

The recommendations

The framework gives the green light to regulators such as the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC) to continue coordinating efforts to enforce the law in the industry and share data on consumer complaints in the area.

The US Treasury Department will take an active role in working with financial institutions to help identify and mitigate cyber risk through data sharing and analysis. It is also tasked with working with regulators to ensure that crypto firms have regulatory guidance.

The Treasury Department will extend this role to US allies through international organizations such as the Organization for Economic Co-operation and Development (OECD) and the Financial Stability Board (FSB).

Treasury is expected to complete an illicit financial risk assessment on decentralized finance by the end of February 2023 and an assessment on non-fungible tokens by July 2023.

President Biden himself must decide “whether to urge Congress to amend the Bank Secrecy Act, anti-tipping statutes and anti-unlicensed money transmission laws to apply explicitly to digital asset providers – including digital asset exchanges and non-functional tokens (NFT) platforms.”

Today’s fact sheet admits there are “opportunities” to ensure blockchain technology is aligned with “a net-zero emissions economy and improving environmental justice.”

Earlier this month, the White House Office of Science and Technology Policy said that cryptominers should reduce greenhouse gas emissions, and suggested that Congress could consider legislation to “restrict or eliminate” energy-intensive consensus mechanisms, in a clear reference to Bitcoinits proof-of-work model.

The report also mentions “a potential US CBDC” and cites many profound potential benefits in technology, economics, security and individual freedom, but efforts in this direction are limited to a set of policy goals for a US CBDC, along with an “interjurisdictional working group” led by the Treasury Department “to assess the potential implications of a US CBDC, leverage cross-governmental technical expertise and share information with partners.”