The White House just put out its first-ever crypto regulation framework in the U.S. This plan includes how the financial services industry should change to make it easier to do business across borders and how to stop fraud in the digital asset space.
The new rules use the power of regulators like the Securities and Exchange Commission and the Commodity Futures Trading Commission, but no one has yet to make a rule. But the long-awaited direction for crypto regulation has caught the attention of both the crypto industry as a whole and investors in this new asset class.
Their concerns are wide-ranging, and their suggestions intent to help make the U.S. a global leader in crypto by encouraging private-sector innovation and international cooperation.
Focus on eliminating illegal activity in crypto industry
In one part of the White House’s new framework for crypto regulation, the focus is on getting rid of illegal activity in the industry, and the proposed steps look like they will work.
The president is also thinking about whether or not to ask Congress to make it harder to send money without a license. He is also thinking about whether or not to change some federal laws so that the Department of Justice can prosecute crimes involving digital assets anywhere a victim can be found.
The framework also shows that a U.S. central bank digital currency, or CBDC, which you can think of as a digital version of the U.S. dollar, could have big benefits.
In the White House’s new framework, it says that a U.S. CBDC could help make a payment system that is more efficient. It could also lay the groundwork for more technological innovation, make cross-border transactions faster, and is good for the environment.
Regulation to make stablecoins safer
Central bankers and U.S. lawmakers have been complaining for years about the rise of stablecoins. Stablecoins are a type of cryptocurrency whose value is tied to a real-world asset, like the U.S. dollar or gold.
Central banks are worried because they don’t have a say in how this space is regulated and these digital tokens are being used more and more in domestic and international transactions.
The framework goes on to mention stablecoins and warn that they could cause disruptive runs if they aren’t regulated properly.
The administration says that to make stablecoins safer, the Treasury will work with financial institutions to improve their ability to find and fix cyber vulnerabilities. They will do this by sharing information and promoting a wide range of data sets and analytical tools. The Treasury will also work with other agencies to find, track, and analyze new strategic risks related to digital asset markets.
