Following a year in which the crypto sector experienced some of the worst upheavals in its short history, the White House has seen fit to publish a blog revealing a roadmap aimed at stabilising the sector.
The blog was published on Friday and included the White House’s summation of the turmoil in the cryptocurrency markets. The main foci for the Administration is to make sure that crypto doesn’t undermine financial stability, that investors are protected, and that any bad actors are held responsible for their actions.
President Biden ordered various government agencies to go away and spend the year identifying the risks posed by cryptocurrencies, and to also come up with ways to nullify them.
According to the blog, a framework has been laid down in order to do just this. Examples of risks include: cryptocurrencies that ignore financial regulations and basic risk controls, misleading consumers, failing to make adequate disclosures, fraud, and poor cybersecurity.
To add to this, agencies are supposed to be ramping up on enforcement and publishing new guidance where necessary. Public awareness campaigns are being launched to explain the risks of purchasing cryptocurrencies.
The blog makes a call on Congress to step up its efforts to expand the regulator's power, strengthen transparency and disclosure requirements, and to bolster the penalties for violating financial rules.
Congress was also called upon to follow the steps recently published by the Financial Stability Oversight Council, and in particular, with regard to stablecoins.
Congress was also advised not to give the green light to institutions such as pension funds to enter the cryptocurrency market, saying that the “limited” exposure of institutions to crypto over the last year had prevented contagion to the broader financial system.
The blog ends by stating that the Administration supports the innovations that make finance cheaper, faster, and safer, but says that safeguards should ensure a digital economy works for all and not just a few.
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.