U.S. Government Presents Concept for Crypto Market Regulation

U.S. federal agencies have prepared a joint fact sheet on key areas of crypto regulation in the country.

U.S. Government Presents Concept for Crypto Market Regulation

The fact sheet, compiled by nine U.S. federal agencies, highlights the need for a unified regulatory framework for the crypto industry. Calls for further research into the crypto market were published on the official White House website. 

The sheet summarizes the results of a six-month study of the cryptocurrency market conducted by various U.S. federal agencies in response to Joe Biden’s executive order regulating the domestic market. According to the fact sheet, the concept of crypto industry regulation is designed to “articulate a clear framework for responsible digital asset development.”

The main principles of the concept were described in seven sections:

  • Protecting consumers, investors, and businesses; 
  • Promoting access to safe, affordable financial services; 
  • Fostering financial stability
  • Advancing responsible innovation; 
  • Reinforcing global financial leadership and U.S. competitiveness; 
  • Fighting illicit finance;
  • Exploring a central bank digital currency (CBDC).

Most of the sections contain well-known information and only highlight basic principles and policies of the government regarding crypto industry regulation. For example, one section reports that the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC) will “aggressively pursue investigations and enforcement actions against unlawful practices in the digital assets space.” By the way, U.S. SEC Chairman Gary Gensler said recently that PoS-based cryptocurrencies would be regulated under the Securities Act. 

However, some concepts do show new facets of the regulation being developed. For instance, the government intends to make some amendments to the Bank Secrecy Act that would tighten oversight of digital asset service providers. According to Changpeng Zhao, founder and CEO of Binance, this U.S. approach to regulating the industry “will help protect consumers, markets and spark responsible innovation.”

The sheet also raised issues about the negative climate impacts of cryptocurrency mining. As a result, the Department of Energy (DOE) and the Environmental Protection Agency (EPA) have been assigned the role of primary regulators to track the environmental impacts of digital asset mining. A recent study by Daniel Batten proved that the Bitcoin network could have a zero-emission footprint in the future.

The last section states that the government has formed “government’s priorities for a potential CBDC” and is ready to start developing a technological framework for the digital dollar. Speaking of which, it was recently reported that Ripple Labs will be involved in developing a tech sandbox program for the Digital Dollar Project (DDP), despite the ongoing SEC lawsuit against the company.

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