In order to battle illicit finance and facilitate research of digital versions of the U.S. dollar for the United States, President Joe Biden is ordering federal agencies to focus more on the rapidly expanding cryptocurrency market. The White House issued a call to government departments across the board, urging them to coordinate what has been a fragmented approach to the new asset class up until this point.
U.S. To Prioritize Digital Assets
According to a statement that was released by senior officials in the United States, including the chief of the National Economic Council Brian Deese and the National Security Advisor Jake Sullivan, the Biden Administration will announce its priorities for research and development of digital assets in the coming months.
The officials believe that U.S. government agencies should continue their efforts to increase enforcement and issue new guidance for cryptocurrencies as necessary. These new guidances should include those that address and limit the exposure of financial institutions to the risks associated with digital assets. They add that the events that took place over the course of the past year underline that more is needed.”
Additionally, officials claim that Congress should increase the authority of regulators in order to avoid the misuse of customers’ money.
They were quoted as saying:
Many everyday investors who trusted cryptocurrency companies—including young people and people of color—suffered serious losses, but, thankfully, turmoil in the cryptoc markets has had little negative impact on the broader financial system.
New Guidelines For Crypto Businesses
In the statement, Congress was also advised to enhance disclosure and transparency standards for crypto-centric businesses, impose fines for breaking laws governing illegal money, and collaborate more closely with foreign law enforcement partners. Additionally, the authorities recommended against Congress’ decision to greenlight mainstream institutions, such as pension funds, to leap headfirst into cryptocurrency markets while formulating new crypto regulations.
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The Biden Administration believes that deepening the connections between cryptocurrency and the larger financial system would be a big mistake. Although FTX was not specifically mentioned in the statement, its influence figured prominently over the officials’ recommendation, which referred to 2022 as “a tough year for cryptocurrencies” marked by the collapse of “a major cryptocurrency exchange” and the implosion of an algorithmic stablecoin–hinting at Terra’s UST–which caused a flurry of liquidations.
It would be a grave mistake to enact legislation that reverses course and deepens the ties between cryptocurrencies and the broader financial system.
The Biden Administration will be announcing priorities for digital assets research development, which will enable the systems underlying cryptocurrencies to protect consumers by default, according to the four officials, in the “coming months.”
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