The Biden administration continues its work on crypto. It just outlined the outlines of future US regulations for the sector and unveiled guidelines on September 16 to support the development of cryptocurrencies, which have been going through a period of severe turbulence since May.
These new directions from the US executive come six months after Joe Biden signed an executive order in early March directing federal agencies to take an interest in developing a central bank digital currency in the United States and to make recommendations for establishing a regulatory framework, with six priorities: protecting consumers and investors, promoting financial stability, fighting illicit financing, US leadership in the global financial system and economic competitiveness, financial inclusion and responsible innovation.
The US president then received nine reports on which he relied to establish: “the first government-wide approach to address the risks and harness the potential benefits of digital assets and their underlying technology”. According to the White House, these reports are “create a clear framework for the responsible development of digital assets and pave the way for further action at home and abroad”.
Change in federal laws in sight
To better regulate the crypto industry, the Biden administration wants to grant strong powers to regulators, such as the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC), who can investigate illegal practices involving digital assets and define rules to mitigate risks to the ecosystem. In the fight against the illegal use of cryptocurrencies, the White House does not rule out calling on Capitol Hill to tighten existing legislation.
“The president will consider asking Congress to amend the Bank Secrecy Act (BSA), anti-whistleblowing and unauthorized money transfer laws to explicitly apply to service providers.” platforms’, the American executive indicates. Joe Biden also reserves the right to urge Congress to increase penalties for transferring money without a license and to change certain federal laws “to enable the Department of Justice to prosecute crimes involving digital assets in any jurisdiction where a victim of such crimes is discovered”.
However, it is not just about detecting malicious actors. To encourage innovation in the sector, the Democratic presidential administration is calling for several measures, such as introducing instant payment systems and improving the efficiency of cross-border payments. The Office of Science and Technology Policy (OSTP) and the National Science Foundation (NSF) are also being asked to launch a digital asset research and development program to look at topics such as next-generation cryptography, the programmability of transactions. , cybersecurity, privacy protection, or even the environmental impact of digital assets.
The digital dollar is still on the table
Finally, the White House wants to continue the digital dollar project, which Joe Biden officially launched early this year. In the eyes of the US executive, a central bank digital currency “has the potential to provide significant benefits”in particular by serving as a basis for “a more efficient payment system” and to “new technological innovations”. It could also be “facilitate faster cross-border transactions” and “promoting financial inclusion and equity by enabling access for a wide range of consumers”.
“A potential US central bank digital currency could also help maintain US global financial leadership and support the effectiveness of sanctions. But it could also have unintended consequences, including races for such currencies in times of stress.”the Biden administration concludes. Now that these guidelines have been established, Democrats will now have to work hard to build crypto legislation that can win the Republican camp.