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Biden Administration Unveils Strategy for Safe and Responsible Cryptocurrency Development

Melina Mara/Pool via REUTERS

The Biden administration's strategy for tackling the risks associated with cryptocurrencies was outlined in a statement released by the White House on January 27. The report, primarily directed at the US Congress, presents a two-part plan for mitigating these risks.

The first element of the plan is the comprehensive framework for digital asset development, which was released in September 2022. This framework was developed based on reports mandated by President Biden's executive order on Ensuring the Responsible Development of Digital Assets, issued in March 2022.
The second element of the plan involves increased enforcement and new guidance from executive agencies.

The statement mentions the creation of public awareness programs by government agencies to educate consumers about the risks of investing in cryptocurrencies. It explicitly references banking regulators and encourages them to continue their efforts. On the same day the statement was issued, the Federal Reserve denied digital asset Custodia Bank membership in the Federal Reserve System.

The statement also includes a list of actions the White House would like to see from Congress, such as expanding regulators' powers, strengthening disclosure requirements, increasing penalties for misconduct, increasing funding for law enforcement, and following the recommendations in the Financial Stability Oversight Council report mandated by the executive order.