The White House released a statement on January 27th, providing the administration of U.S. President Joe Biden with a roadmap for mitigating the risks associated with cryptocurrencies. Many of the documents were submitted to the U.S. Congress under the administration’s legislative guidance.
The statement’s authors outlined a path that could go in two directions. they wrote:
“Over the past year, we have identified the risks of cryptocurrencies and used the authority of the executive branch to act to mitigate them.”
The first element of the roadmap is the administration’s “first-ever” comprehensive framework for digital asset development announced in September. That document was based on a report mandated by the president’s Executive Order on Ensuring the Responsible Development of Digital Assets issued in March.
Second, enforcement agencies are stepping up enforcement and issuing new guidance. According to the statement, the agency is developing a public awareness program to “help consumers understand the risks of buying cryptocurrencies.” It specifically referred to banking regulators and encouraged them to continue their efforts. The statement was issued the same day the Fed denied membership in the Federal Reserve’s Digital Asset Custodian Bank.
We continue to reduce cryptocurrency risk by protecting investors and holding bad actors accountable. We stand ready to work with Congress to address regulatory gaps, but reversing course and deepening the relationship between crypto and the financial system would be a grave mistake https://t.co/qLBetgMG1e
— Brian Deese (@BrianDeeseNEC) January 27, 2023
Among other things, the statement provides a wishlist of actions the administration wants Congress to take, stating:
“Congress must step up its efforts, too.”
The White House has quite a list of congressman’s mandates. Its recommendations include expanding regulatory powers, tightening disclosure requirements, tightening penalties for misconduct, increasing funding for law enforcement agencies, and implementing the Financial Stability Oversight Council report mandated by executive order. This includes following the advice provided.
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The author also took the opportunity to urge Congress not to do something.
“The law should not allow mainstream institutions like pension funds to dive headlong into the cryptocurrency market.”
Restricting such behavior prevented the “cryptocurrency chaos” from spreading to the broader financial system, they said.