United States President Joe Biden has passed an executive order on crypto, which is called “Ensuring Responsible Development of Digital Assets.
After this, the federal agencies introduced a joint fact sheet on six principal directions for regulation in the U.S. Joe Biden’s administration has earlier lobbied for more control and increased laws on cryptocurrencies owing to the increased popularity of digital assets.
The joint fact sheet made by the federal agencies primarily adds up the content of the nine separate reports that have been provided to the President to ensure an “articulate and clear framework for responsible digital asset development and paves the way for further action at home and abroad.”
The decision to pass an order could be suggestive of the nature of cryptocurrencies, which means that high volatility is associated with digital assets.
Volatility has been one of the major concerns related to the cryptocurrency industry and that has created problems throughout the industry, as seen in new reports.
This has made the United States form and structure regulations on digital assets.
What Does The Crypto Framework State
The framework mentions the various methods by which a financial services sector would be able to transform in order to conduct borderless transactions more easily.
This framework also targets bringing down fraud within the industry.
A statement from the Biden administration quoted that,
Digital assets pose meaningful risks for consumers, investors, and businesses. The prices of these assets can be highly volatile: the current global market capitalization of cryptocurrencies is approximately one-third of its November 2021 peak.
This fact sheet was published today, September 16, 2022. It comprises seven sections, to be specific.
(1) Protecting Consumers, Investors, and Businesses; (2) Promoting Access to Safe, Affordable Financial Services; (3) Fostering Financial Stability; (4) Advancing Responsible Innovation; (5) Reinforcing Our Global Financial Leadership and Competitiveness; (6) Fighting Illicit Finance; (7) Exploring a U.S. Central Bank Digital Currency (CBDC).
The White House statement mentioned how various government agencies could come together and ensure that the digital currency space grew without many hindrances.
To Protect Customers And Investors
The crypto framework mentions the various methods by which a financial services sector would be able to transform in order to conduct borderless transactions more easily.
The risks that were alluded to by the White House were mainly related to price volatility and crypto scams.
The statement by the White House encouraged the Securities and Exchange Commission and Commodity Futures Trading Commission to “aggressively pursue investigations and enforcement actions against unlawful practise in the digital asset space.”
At the present moment, neither the SEC nor the CFTC has oversight over the crypto industry today.
The SEC in particular has been scrutinising the crypto market after the agency’s chairman, Gary Gensler, mentioned this week again that most digital assets need to be classified as securities.
This report has also asked the Consumer Financial Protection Bureau and the Federal Trade Commission to reprimand ill-conceived practices in the industry.
It has also been suggested that government agencies team up and address the associated consumer risks to publish clear guidance and rules on the crypto space.