On September 16th, a first-ever ‘Comprehensive Framework’ was unveiled by the White House, which is aimed at the development and regulation of crypto assets in a responsible manner.
It essentially outlines the recommendations and conclusions of different federal agencies that had been studying the crypto industry for about six months.
This year in March, President Joe Biden signed an executive order in which he directed the authorities to research cryptocurrencies.
Similar to the executive order, the ‘comprehensive framework’ only provides a clear view of how cryptocurrencies should be regulated in the United States and does not introduce any new legislation.
A total of nine reports had been submitted to the President after the executive order had been issued, which were used to develop the new framework.
It was stated that the framework is a reflection of the expertise and input of a number of stakeholders spread across the industry, government, civil society, and academia.
They have wide-ranging concerns due to which the recommendations include obvious and non-obvious things.
The former include national and environmental security as well as consumer protection. As for the latter, it is about establishing the role of the US as a global crypto leader.
This can be accomplished through international cooperation and innovation in the private sector.
The different sections
It should be noted that the framework presented has been divided into multiple sections. There is a section for protecting investors, consumers, and businesses.
One is focused on ensuring responsible innovation and another on combating illicit finance. There is also one that focuses on the promotion of affordable and safe financial services.
Another is about fostering financial stability, while one is about ensuring the global financial competitiveness and leadership of the US.
Most importantly, there is also one that explores the idea of launching a central bank digital currency (CBDC) in the United States.
The framework suggests that regulatory authorities like the Commodity Futures Trading Commission (CFTC) and the Securities and Exchange Commission (SEC) continue working together for overseeing the industry.
It also suggests that they share the data regarding consumer complaints related to the industry. An active role will be adopted by the US Treasury in helping financial institutions.
It would assist them in identifying as well as mitigating cyber risks via data analysis and sharing. It also has to work with regulators for providing regulatory guidance to crypto companies.
This role will also be extended by the US Treasury department to the country’s allies via international organizations.
These include the Financial Stability Board (FSB) and the Organization for Economic Cooperation and Development (OECD).
The Treasury has also been tasked with completing a risk assessment of illicit finance on decentralized finance and on non-fungible tokens (NFTs) by the end of February and July 2023, respectively.
The final decision will rest with President Joe Biden about whether amendments would be required to the Bank Secrecy Act, laws relating to unlicensed money transfers, and anti-tip-off statutes for digital assets.