The US has released its first framework for the regulation of crypto. This step was taken to control activities and penalize fraudulent acts in the digital space.
Before this, there was an executive order from the White House to federal agencies in March 2022. The order directed that a report be sent outlining “the risks and benefits of cryptocurrencies”. The Securities and Exchange Commission and the Commodity Futures Trading Commission are part of the bodies contacted for the reports.
Details of the report includes: countering illicit finance; consumer and investor protection; U.S. leadership in the global financial system and economic competitiveness; promoting financial stability; financial inclusion; and responsible innovation.
Speaking about the new framework, Brian Deese, Director of the National Economic Council, explained that it will align the US as a leading nation in the regulations of the digital space.
NFTs, stablecoins, and CBDCs
Part of the framework shows that the President will work with the Congress, and the Department of Justice to amend certain policies. Some of the intended policies include the “Bank Secrecy Act, anti-tip-off statutes, and laws against unlicensed money transmitting”. Exchanges for digital assets and NFTs are not left out of this overview.
There are strong directions toward having a CBDC from the US Central Bank. Although several commercial banks are using digital US dollars (stablecoins), the federal reserve will still need to have a digital dollar under its control.
Stablecoins are another kind of currency that is being considered. Currently, there are several USD-pegged stablecoins like Tether’s USDT and USD Coin, and they have gained huge acceptance across the world and in the US.
These situations mean that having a digital currency – dollar – is pertinent. With a digital dollar, there will be no need for either stablecoins or cryptocurrencies, Jerome Powell, Fed. Reserve Chair said.
The White House also believes that a CBDC will enhance cross-border payments, support financial inclusion, inspire more technological innovation, and is environmentally friendly.
Biden’s administration has announced its support for further research and development of a CBDC for the US. This process will be done in partnership with foreign organizations like Organization for Economic Cooperation and Development and the Financial Stability Board.