Members of the crypto space and advocacy groups reacted to US President Joe Biden’s administration releasing a digital asset regulatory framework, with many suggesting the White House was focusing on the potential negative aspects of crypto.
In an announcement Friday, the White House said federal agencies and departments had submitted nine reports required by Biden’s executive order on crypto since March. Among the information in the fact sheet included policy goals for a digital currency from a US central bank, ways to reduce the possible impact of crypto’s energy use on the climate, regulatory goals for enforcement actions, rules to manage risk and consumer protection.
The Biden administration said the Treasury Department will report on an “illicit financial risk assessment on decentralized finance” by February 2023, adding that federal agencies will “continue to expose and disrupt illicit actors and address misuse of digital assets.” In addition, the White House said it would support payment systems similar to FedNow, which the Federal Reserve planned to launch in 2023.
Cryptoanalyst Dylan LeClair and MicroStrategy co-founder Michael Saylor, both criticised the administration’s stance on Twitter, claim it used environmental concerns as a pretext to expand its control over digital assets:
“If you don’t like how someone uses energy, pay a higher price than them […] No amount of hysterical shouting about climate change will stop the next block from being mined.”
“Today’s reports and summary of the Biden administration’s executive order on digital assets are a missed opportunity to cement American crypto leadership,” said Kristin Smith, executive director of the US-based Blockchain Association. “While intended to be part of a broader government and stakeholder effort to bring better regulation to cryptoassets, these reports focus on risks — not opportunities — and leave out substantive recommendations on how the U.S. can advance its burgeoning crypto industry.”
The White House’s proposed framework is a damn shame.
– Clear attack on proof-of-work by suggesting they will set environmental standards for mining.
– Pushes FedNow over crypto
– Promote anything as a potential scam or threat
– Harping on volatility and consumer risk
— The Wolf Of All Streets (@scottmelker) 16 September 2022
Sheila Warren of the Crypto Council for Innovation told Cointelegraph that the policy recommendations appeared to be based on an “outdated and unbalanced understanding” of crypto, which could leave the details to be determined by other lawmakers or the next administration:
“At the hearing yesterday [on regulating crypto], many seemed worried that other countries would take over the United States. Regulation by enforcement is not regular clarity. If we regulate by enforcement, it also gives other countries a clear runway to figure out how the technology works for their interests, which may be at odds with America’s.”
Related: Crypto policy advocacy group warns of ‘catastrophic’ provision in new US bill
The reports on the establishment of a comprehensive regulatory framework for cryptocurrencies in the United States were some of the first called for since President Biden announced the order in March, but the work is far from over. The Treasury Department and the Fed will continue to examine the implications of releasing a digital dollar. The White House said the Financial Stability Oversight Council will publish a report in October on financial stability risks posed by digital assets and related regulatory gaps.