The White House has released, for the first time, a comprehensive framework for cryptocurrency regulations. This is a work that has been performed by multiple federal agencies and that took several months to be prepared. The information was released by the White House a few hours ago in an official statement.
White House Releases Crypto Regulatory Framework
The White House has finally released a comprehensive framework for the responsible development of digital currencies following the President’s Executive Order to protect consumers, investors and businesses.
This crypto regulatory framework comes out at a moment in which a larger number of companies are investing in Bitcoin and other virtual currencies. Let’s not forget that 2021 was a very positive year for cryptocurrencies. BTC reached a price of $69,000 per coin at the end of the year, and this attracted a large number of investors.
Moreover, there are other things to take into consideration. For example, thanks to blockchain networks such as Ethereum (ETH), Binance Smart Chain (BSC), or Solana (SOL), the decentralized finance (DeFi) market expanded and it also allowed for alternative investments such as non-fungible tokens (NFTs).
One of the main goals of this framework involves protecting consumers, investors and businesses. According to the statement, digital assets pose meaningful risks for these market participants. It is also true that several crypto projects (especially during the ICO boom) were simple exist-scams that were created just to steal investors’ funds.
The report reads as follows:
“The reports call on agencies to promote innovation by kickstarting private-sector research and development and helping cutting-edge U.S. firms find footholds in global markets. At the same time, they call for measures to mitigate the downside risks, like increased enforcement of existing laws and the creation of commonsense efficiency standards for cryptocurrency mining.”
The official announcement about the report explains that regulators in the United States (such as the Securities and Exchange Commission (SEC) or the Commodity Futures Trading Commission (CFTC), should take investigations and enforcement actions against unlawful practices in the crypto market.
Furthermore, there are other sections that promote access to safe and affordable financial services to populations that have been excluded from the system. For example, in El Salvador, where Bitcoin is now legal tender, there are more crypto wallet accounts than active bank accounts in the country. Therefore, Bitcoin and cryptocurrencies have had a more profound impact on users than traditional financial services companies.
Other topics discussed include responsible innovation, financial stability, global leadership, fighting illicit finance, and exploring the possibility of issuing a Central Bank Digital Currency (CBDC).
Currently, some of the companies that have purchased Bitcoin in recent years include Tesla, MicroStrategy, MassMutual, and many others. Finally, El Salvador and the Central African Republic have made Bitcoin legal tender, becoming the first two countries where it is possible to use BTC as a means of payment as any other legal tender currency.
Therefore, virtual currencies have expanded and the United States wants to make sure that there is a regulatory framework in place for them.