The White House recently announced a plan to reduce the risks associated with the crypto market. The U.S. administration provided a great deal of legislative advice to Congress.
The statement presented a two-pronged strategy for moving forward.” We have spent the last year assessing the hazards associated with cryptocurrencies and taking steps to reduce them by utilizing the powers that the Executive Branch has,” they wrote.
This road map begins with the government's "first-ever" comprehensive framework for creating digital assets, released in September 2022. Based on reports required by the president's executive order on ensuring the responsible development of digital assets, which was issued in March 2022, that paper was created.
Additionally, executive agencies are stepping up enforcement and publishing new instructions. Government organizations are creating public awareness campaigns, said the statement, "to help consumers realize the hazards of obtaining digital assets." It specifically named bank regulators and urged them to keep up their efforts. The announcement was made on the same day that the Federal Reserve rejected Custodia Bank's application to join the Federal Reserve System.
Notably, the statement continued with a list of demands the administration had for Congress, stating that it "needed to amp up its efforts."
The White House has a lengthy list of responsibilities for lawmakers. Among its recommendations are to give regulators more authority, to make disclosure requirements more stringent, to stiffen penalties for misconduct, to increase funding for law enforcement, and to heed the counsel contained in the report of the Financial Stability Oversight Council, which was required by the executive order.
In addition, the document used the occasion to encourage Congress not to take certain actions: "Legislation should not give permission for established institutions like pension funds to foray aggressively into the digital markets." The authors stated that limiting such activities prevented the "turmoil in the crypto market" from spreading.
President Biden hasn't exactly made it a priority either in the two years from early 2021 to just a few weeks ago when Democrats controlled the presidency, the House, and the Senate. However, the White House was quick to accuse Republicans of the crypto-related delay. Several scandals rocked the cryptocurrency industry at that time, including the collapse of UST in May and the collapse of the $32 billion crypto exchange FTX in November.
There are numerous crypto proposals circulating in Washington right now, but none have been put to vote. In December, the Senate received the Stablecoin TRUST Act, which would provide a national regulatory framework for "payment stablecoins." The Lummis-Gillibrand Responsible Financial Innovation Act has been kicking around the Senate since last June, giving the CFTC regulatory power over the crypto market
The August-introduced Digital Commodities Consumer Protection Act (DCCPA) would have similarly limited the SEC's ability to regulate the evolving industry. The DCCPA won bipartisan support from lawmakers in the autumn, but its connection to Bankman-Fried—who is presently facing eight criminal accusations, including conspiracy to commit money laundering and fraud—could scupper its chances of becoming law.