The White House has published a "road map to mitigate the risks of cryptocurrencies." The roadmap requires authorities to “increase enforcement where appropriate” and Congress “to intensify their efforts” to regulate the crypto sector. He also points out that the legislation should not give major institutions the green light “to dive headfirst into the cryptocurrency markets.”
'The Administration's Roadmap to Mitigating Crypto Risks'
The White House published a blog post titled "The Administration's Roadmap to Mitigating Crypto Risks" on Friday under the National Economic Council (NEC), an Executive Office of the President (EOP) established to advise the president on US and global economic policy
The roadmap is written by four White House advisers: 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 charged with providing objective economic advice on both domestic and international economic policy-making, while the OSTP advises the president on all matters relating to science and technology.
White House advisers detailed:
Under the leadership of President Biden, we have spent the last year identifying the risks of cryptocurrency and acting to mitigate them using the powers 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 a number of risks, including crypto entities ignoring applicable financial regulations and basic risk controls, misleading consumers, having conflicts of interest, providing inadequate disclosures, and committing outright fraud. Furthermore, the authors claimed that "there is poor cybersecurity across the industry" that has allowed North Korea to "steal more than $1 billion to fund its aggressive missile program."
Encouraging regulators to continue "using their authorities to increase enforcement where appropriate and issue new guidance where necessary," the roadmap authors emphasized:
The events of the past year underscore that more is needed. Agencies have redoubled their efforts to combat fraud… Enforcement agencies are devoting increased 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 revealed.
Congress needs to “step up its efforts” to regulate cryptocurrencies
The roadmap also calls on Congress to "intensify its efforts" to regulate the cryptocurrency sector, such as expanding the powers of regulators to prevent misuse of customer assets and mitigate conflicts of interest.
White House advisers suggested that Congress could also strengthen transparency and disclosure requirements for cryptocurrency companies, increase penalties for violating illicit financing rules, and subject crypto intermediaries to bans against criminals. However, they warned:
The legislation should not give major institutions, such as pension funds, the green light to dive headfirst into cryptocurrency markets.
The advisers explained that the limited exposure of traditional financial institutions to cryptocurrencies over the past year prevented turmoil in the cryptocurrency market from affecting the broader financial system.
In conclusion, they emphasized:
The Administration wholeheartedly supports responsible technological innovations that make financial services cheaper, faster, safer and more accessible.
However, the authors of the roadmap noted that "to reap these benefits, new technologies need commensurate safeguards," explaining, "To put the right safeguards in place, we will continue to leverage the digital asset framework we have developed, while working with Congress to accomplish these objectives."
What do you think of the White House advisers' roadmap for mitigating cryptocurrency risks? Let us know in the comments section.
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