The administration of President Joe Biden has raised concerns about recent developments in the cryptocurrency markets and their impact on the financial health of average Americans, releasing a series of reports on Friday outlining policy recommendations for regulating digital assets.
The recent turmoil in the cryptocurrency markets “shows how, without proper oversight, cryptocurrencies can wreak havoc on the financial stability of ordinary Americans and our national security,” National Economic Council Director Brian Deese told reporters at a news conference on Thursday evening.
The Biden administration “believes that careful regulation of cryptocurrencies is needed now more than ever if digital assets are to play the role we believe in promoting innovation and supporting our economic and technological competitiveness,” he added.
The comments accompany several reports released by the Treasury Department and other agencies on Friday morning, as required by an executive order issued by Biden in March.
The reports cover topics ranging from consumer protection and financial stability to the impact of cryptocurrencies on national security, and offer a range of recommendations that will guide the Biden administration’s digital asset policy going forward.
The report recommends that financial regulators and law enforcement agencies “continue vigilant oversight of the crypto asset sector” and “proactively pursue investigations… with a particular focus on consumer, investor and market protection.”
These statements seem to support the increasingly aggressive stance of Securities and Exchange Commission Chairman Gary Gensler on the digital asset industry.
In a keynote last week, Gensler argued that the vast majority of crypto projects in the United States currently operate in violation of federal securities law and pose a threat to the financial health of average investors by failing to comply with disclosure rules.
There has been significant tension in the cryptocurrency markets in the months between Biden’s executive order and Friday’s reports, with Bitcoin prices BTCUSD,
and other plummeting digital assets, and many crypto projects went bankrupt.
The failures of projects such as Terra, Celsius, and Voyager caused financial damage to many investors in the US and around the world, who invested large sums before their tokens plummeted in price or their accounts were frozen.
The administration also raised concerns that digital assets could facilitate illicit finance such as money laundering, terrorist financing and other crimes, and suggested that Biden consider whether he should recommend that Congress update laws such as the Bank Secrecy Act aimed at combating with finances. crimes, to account for cryptographic innovations.
The reports raise hope that the digital asset industry will drive financial innovation and potentially lead to new products and services that reduce the cost of payments and increase financial inclusion.
For example, the Treasury Department’s study of a potential digitized dollar to be issued by the Federal Reserve reflects optimism that a central bank digital currency can “contribute to a more efficient payment system, provide a foundation for new technological innovation, and facilitate more efficient interaction.” – Border deals.