The White House has unveiled a plan aimed at reducing the risks associated with cryptocurrencies. This “roadmap” urges regulators to increase enforcement in necessary areas and for Congress to take a more active role in regulating the cryptocurrency industry. It cautions that legislation should not give mainstream organizations the green light to blindly invest in the cryptocurrency markets.
White House Releases Plan to Address Cryptocurrency Threats: The Roadmap
The White House’s National Economic Council (NEC) released a blog post titled “The Administration’s Roadmap to Mitigate Cryptocurrency Risks”. The NEC, which is part of the Executive Office of the President, provides economic policy advice to the president.
The roadmap was written by four White House advisors: 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 Advisor Jake Sullivan. The CEA offers impartial economic advice on domestic and international economic policy, while the OSTP provides the president with advice on science and technology issues.
The White House advisors detailed: “At President Biden’s direction, we have spent the past year identifying the risks of cryptocurrencies and acting to mitigate them using the authorities that the Executive Branch has.”
“Experts across the administration have laid out the first-ever framework for developing digital assets in a safe, responsible way while addressing the risks they pose,” they added.
The White House roadmap highlights various risks, such as disregarding financial regulations, lacking risk management, deceiving consumers, having conflicting interests, insufficient disclosures, and fraudulent activities. The authors also noted the inadequate cybersecurity in the industry that has allowed North Korea to steal more than a billion dollars to finance its missile program.
The authors of the roadmap emphasize the need for regulators to increase enforcement and provide new guidance as necessary, they stressed:
The events of the past year underscore that more is needed. Agencies have redoubled their efforts to fight fraud … Enforcement agencies are devoting increased resources to combatting illicit activities involving digital assets.
“In the coming months, the Administration will also unveil priorities for digital assets research and development, which will help the technologies powering cryptocurrencies protect consumers by default,” they revealed.
The authors urge Congress to increase its efforts in regulating the crypto industry, such as granting regulators more authority to protect customer assets and prevent conflicts of interest.
They also recommend that Congress enhance transparency and disclosure requirements for cryptocurrency companies, impose stricter penalties for breaking anti-finance laws, and apply similar restrictions to crypto intermediaries to prevent alerting criminals.
However, they cautioned: “Legislation should not greenlight mainstream institutions, like pension funds, to dive headlong into cryptocurrency markets.”
The advisors explained that the limited exposure of traditional financial institutions to crypto over the past year has prevented turmoil in the crypto 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 acknowledge that proper safeguards are required to fully realize the benefits of these new technologies. They state that they will continue to develop the digital-assets framework and work with Congress to implement the necessary safeguards.
Joy Rice is a computer science graduate and crypto writer with a strong understanding of blockchain technology. She writes about the latest developments in the crypto industry, and is passionate about educating and informing readers about the potential uses of blockchain.
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