The Biden administration has released its first-ever comprehensive framework aimed at regulating digital assets like cryptocurrencies, including cracking down on fraud and fostering financial stability.
The reports encourage federal regulators like the Commodity Futures Trading Commission (CFTC) and the Securities and Exchange Commission (SEC) to “aggressively pursue” investigations and enforcement actions against unlawful practices involving digital assets.
President Biden will evaluate whether Congress needs to be called to amend the Bank Secrecy Act (BSA), laws against unlicensed money transmitting, and anti-tip-off statutes, so that they also apply to digital asset service providers.
In February, $3.6 billion worth of Bitcoins were seized by U.S. officials that were linked to the hack of crypto exchange Bitfinex back in 2016. This was their biggest ever seizure of cryptocurrencies.
Central Bank Digital Currency
The White House fact sheet also states that the government is exploring introducing a U.S. central bank digital currency (CBDC), which will act as a digital form of the dollar. The Biden administration is encouraging the Federal Reserve to continue its research, experimentation, and evaluation of CBDC, it said.“To support the Federal Reserve’s efforts and to advance other work on a potential U.S. CBDC, the Treasury will lead an interagency working group to consider the potential implications of a U.S. CBDC, leverage cross-government technical expertise, and share information with partners.”
However, the issue of a government CBDC has its areas of concern. In March, three GOP senators pushed forward a bill seeking to prohibit the Federal Reserve from issuing CBDC directly to individuals, warning that it could end up being used as a financial surveillance tool.
“This bill goes a long way in making sure big government doesn’t attempt to centralize and control cryptocurrency so that it can continue to thrive and prosper in the United States,” Cruz stated.