US President Joe Biden has passed an executive order on crypto, which is called “Ensuring Responsible Development of Digital Assets.
Following this, the federal agencies introduced a joint fact sheet on six major areas of regulation in the United States. Joe Biden’s administration has previously lobbied for more control and increased laws on cryptocurrencies due to the increased popularity of digital assets.
The joint fact sheet created by the federal agencies primarily brings together the content of the nine separate reports provided to the president to ensure an “articulated and clear framework for the responsible development of digital assets and paves the way for further action at home and abroad .”
The decision to place an order may indicate the nature of cryptocurrencies, which means that high volatility is associated with digital assets.
Volatility has been one of the biggest concerns related to the cryptocurrency industry, and it has caused problems throughout the industry, as we see in new reports.
This has led the United States to shape and structure regulations on digital assets.
What does Crypto Framework mean
The framework mentions the various methods that a financial services sector will be able to transform to make borderless transactions easier.
This framework also aims to reduce fraud in the industry.
A statement from the Biden administration quoted that,
Digital assets pose a meaningful risk to consumers, investors and businesses. The prices of these assets can be highly volatile: the current global market value of cryptocurrencies is about a third of its peak in November 2021.
This fact sheet was published today, September 16, 2022. It consists of seven sections, to be specific.
(1) Protection of consumers, investors and businesses; (2) Promote access to safe, affordable financial services; (3) Promote financial stability; (4) Promote responsible innovation; (5) Strengthen our global financial leadership and competitiveness; (6) Combating Illicit Finance; (7) Exploring a US central bank digital currency (CBDC).
The statement from the White House mentioned how various government agencies could come together and ensure that the digital currency space grew without many obstacles.
To protect customers and investors
The crypto framework mentions the various methods that a financial services sector will be able to transform to carry out borderless transactions more easily.
The risks referred to by the White House were mainly related to price volatility and crypto fraud.
The White House statement urged the Securities and Exchange Commission and the Commodity Futures Trading Commission to “aggressively pursue investigations and enforcement actions against illegal practices in the digital asset space.”
Currently, neither the SEC nor the CFTC oversees the crypto industry today.
In particular, the SEC has been scrutinizing the crypto market after the agency’s chairman, Gary Gensler, mentioned again this week that most digital assets must be classified as securities.
This report also called on the Consumer Financial Protection Bureau and the Federal Trade Commission to reprimand ill-conceived practices in the industry.
It has also been suggested that government agencies join forces and address the associated consumer risks to publish clear guidelines and regulations for the crypto space.
Featured image from UnSplash, Chart: TradingView.com