The White House has issued a ‘road map’ for mitigating the risks of cryptocurrencies. The guidelines are intended to help U.S. authorities “increase enforcement where appropriate” and urge Congress to “intensify their efforts” in managing the crypto sector. It is also noted that laws should not give main establishments the inexperienced green light “to dive headfirst into the cryptocurrency markets.”
‘The Administration’s Guidelines for Crypto Regulations’
The White House published a blog post on Friday, entitled “The Administration’s Roadmap to Mitigating Crypto Risks” under the National Economic Council (NEC) and Executive Office of the President (EOP). According to the authors, the NEC and EOP are meant to provide advice to the president on U.S. and international financial policy.
The roadmap was crafted by four White House advisors: NEC Director Brian Deese, Office of Science and Technology Policy (OSTP) Director Arati Prabhakar, Council of Economic Advisers (CEA) Chair Cecilia Rouse, and National Security Adviser Jake Sullivan. The CEA is responsible for offering economic advice on both domestic and global policy-making while the OSTP advises the president on all matters related to science and technology.
White House advisors detailed:
Under the leadership of President Biden, the past twelve months have been spent identifying the risks associated with cryptocurrency and attempting to mitigate them with the help of the Executive Branch.
“Experts from across the administration have presented the first framework for developing digital assets in a secure and responsible way while addressing the risks they pose,” they added.
The framework identifies several risks. These include crypto entities that ignore relevant financial regulations, inadequate risk controls, misleading investors, having conflicts of interest, providing insufficient disclosures and committing outright fraudulent acts. Furthermore, according to the authors, “there is poor cybersecurity across the industry” which has made it possible for North Korea to “steal more than $1 billion to fund its aggressive missile program.”
Encouraging Regulators to Proceed “using their authorities to increase enforcement where appropriate and issue new guidance where necessary,” the authors of the roadmap stressed that:
Recent events from the past twelve months show that there is more to be done. Agencies have redoubled their efforts to fight fraud… Enforcement agencies dedicate high-level resources to combating illicit activities involving digital assets.
“In the coming months, the Administration will also unveil priorities for digital asset research and development, which will help the technologies that power cryptocurrency protect consumers by default,” they noted.
Congress Must “step up its efforts” To regulate cryptocurrencies
The roadmap also calls for Congress to “intensify its efforts” to regulate cryptocurrency, which includes increasing regulators’ powers to prevent investor asset misuse and reduce conflicts of interest.
White House Advisors suggest that Congress could increase transparency and disclosure requirements for crypto businesses, raise penalties when they violate anti-money laundering rules, or subject crypto intermediaries to bans against criminals. However, they warned:
The laws should not allow main establishments (such as pension funds), to give the inexperienced the green light to dive headfirst into cryptocurrency markets.
The advisors said that turmoil in the cryptocurrency market was prevented from the wider financial system by the limited exposure of traditional financial institutions to cryptocurrencies over the past 12 months.
In conclusion, they stressed:
The Administration supports technological advancements that make financial services more affordable, faster, safer, and more accessible.
However, the roadmap’s authors are well-known for their work. “to reap these benefits, new technologies need commensurate safeguards,” explaining, “We’ll ensure that we have the best security measures in place so we can continue to use the digital asset framework we have created, while also working with Congress to achieve these goals.”
What do you think of the White House advisors’ roadmap for regulating cryptocurrencies? Please let us know in the comments section.
