The Biden White House has just released its “comprehensive” framework for regulating digital assets. Here’s a brief breakdown.
What roles the different government agencies will play:
The Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC) will be encouraged to ‘aggressively’ investigate unlawful practices in the digital assets space.
The report encourages the Federal Trade Commission (FTC) and the Consumer Financial Protection Bureau (CFPB) to monitor consumer complaints and enforce against deceptive, abusive, and unfair practices.
The Financial Literacy and Education Commission (FLE) will lead efforts to increase public awareness and help consumers learn how to report misconduct, identify common practices of fraud, and understand the risks associated with digital assets.
The Financial Stability Oversight Council (FSOC) will be publishing a report discussing the financial stability risks of digital assets, identifying regulatory gaps, and making recommendations to promote an increase in financial stability.
In an effort to promote safe, affordable financial services, the White House will be taking the following actions:
Government agencies will encourage the adoption of instant payment systems, specifically FedNow (a 24/7 instant clearing system to launch in 2023) as well as the innovation of safe instant payment technologies. Furthermore, agencies will prioritize the improvement in the efficiency of cross-border payments.
The Treasury will work with financial institutions to increase their capacity for identifying and mitigating cyber vulnerabilities. The treasury will also work with agencies to identify and analyze emerging risks in or related to digital asset markets.
The U.S. government will continue to monitor the development of the digital asset sector to identify gaps in its legal, regulatory, and supervisory regimes along with the treasury conducting an illicit finance risk assessment on DeFi by February 2023 and on NFTs by July 2023.
U.S. agencies will leverage their positions in international organizations to convey U.S. values related to digital assets, such as data privacy, free and efficient markets, financial stability, consumer protection, robust law enforcement, and environmental sustainability.
The department of commerce will work to help financial technology and digital asset firms gain a strong position in global markets.
Exploring a U.S. Central Banking Digital Currency
The current administration has developed objectives in alignment with the federal government for a potential U.S. CBDC.
The report states that a CBDC “If implemented, should protect consumers, promote economic growth, improve payment systems, provide interoperability with other platforms, advance financial inclusion, protect national security, respect human rights, and align with democratic values.”
The administration has encouraged the U.S. federal reserve to continue its research and evaluation, along with the treasury leading a committee to further examine the implications of a CBDC.
