The White House issued a legal framework for engaging with bitcoin and cryptocurrencies in the United States following a “whole of government” Executive Order (EO) from President Joe Biden earlier this year, according to a official press release.
The “Ensuring responsible development of digital assets” EO called on government agencies to produce various forms of research regarding consumer privacy and protection, energy consumption, and the benefits and risks of central bank digital currency (CBDC).
Consistent with the research provided, the White House intends to empower the Securities and Exchange Commission (SEC) and the Commodities Futures Trading Commission (CFTC) to “aggressively pursue investigations” in the digital asset space.
Additionally, the Biden administration will push the Consumer Financial Protection Bureau (CFPB) and the Federal Trade Commission (FTC) to “double their efforts to monitor” the ecosystem for “unfair, deceptive, or abusive practices.” .
However, it is unclear what determines whether or not these agencies will start monitoring the aforementioned malicious behavior.
Continuing, the framework also calls on agencies to start accepting “instant payment systems,” such as FedNow and to consider regulating non-bank payment providers.
In addition, the National Science Foundation (NSF) will conduct research on “technical and socio-technical disciplines and behavioral economics” to understand digital asset ecosystems.
Following a recent White House report Office of Science and Technology Policy (OSTP), the Department of Energy (DoE), and the Environmental Protection Agency (EPA) are responsible for “monitoring the environmental impacts of digital assets; develop performance standards, where appropriate; and providing local authorities with the tools, resources and expertise needed to mitigate environmental damage.
Additionally, the Bank Secrecy Act will be amended to apply to digital assets, resulting in higher fines for unlicensed money transfers and stricter enforcement of digital asset service providers.
In addition, the US Treasury Department will conduct a risk assessment with respect to Decentralized Finance (De-Fi).
Finally, the Biden administration has developed “Policies for an American CBDC System,” which detail the government’s priorities for unleashing a digital dollar. However, the statement said “further research is needed.”
The agencies that have been selected to lead the ongoing task force for the research and possible development of a CBDC include the Federal Reserve, the National Economic Council, the National Security Council, the Office of Science and Technology Policy and the Treasury Department.