The Biden administration is setting a precedent with its initial framework for digital asset regulation. framework This follows the issuance of Executive Order 14067 in March.
The order, titled ‘Ensuring Responsible Development of Digital Assets,’ mandated that extensive research be conducted across several sectors related to cryptocurrency. Over a span of six months, various federal agencies investigated the strengths and weaknesses of cryptocurrencies, culminating in an official report for the government.
The Executive Order highlighted the urgent need to regulate cryptocurrencies, particularly due to the risks associated with stablecoins. The report cites the significant crash of TerraUSD , which resulted in losses nearing $600 billion and triggered financial instability for other companies, including Three Arrow Capital , which declared bankruptcy in July.
Among other proposed frameworks and policy suggestions aimed at development were: ensuring consumer and investor safety, fostering financial stability, combating illicit financial practices, maintaining U.S. leadership in the global financial arena, enhancing economic competitiveness, promoting financial inclusion, and facilitating responsible innovation.
Subsequently, Congress has begun discussing initiatives focused on the advancement of the industry, emphasizing the need to root out illegal activities within the cryptocurrency space.
“The President will assess whether to prompt Congress to revise the Bank Secrecy Act, adjust anti-tip-off laws, and enforce regulations against unlicensed money transfers to explicitly encompass digital asset service providers, including exchanges and NFT platforms,” as outlined in The White House fact sheet.
Looking ahead, the government aims to introduce a U.S. Central Bank Digital Currency (CBDC). This new digital currency is expected to function as a more efficient system that promotes technological innovation, accelerates international transactions, and aligns with environmental sustainability standards.
The White House plans to collaborate on further developments alongside the Organization for Economic Cooperation and Development and the Financial Stability Board.
The entire cryptocurrency community has eagerly anticipated the establishment of U.S. regulations for digital assets for a considerable period now.
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