US President administration releases its first comprehensive framework of cryptocurrencies, digital assets.
While digital assets present potential opportunities to reinforce US leadership in the global financial system, they also pose real risks as evidenced by recent events in crypto markets, such as the crash of stablecoin TerraUSD, known as UST, in May that erased over $600 billion from the market, the White House said in a statement.
After the deliberate study, various government agencies have identified six key priorities -- consumer and investor protection; promoting financial stability; countering illicit finance; US leadership in the global financial system and economic competitiveness; financial inclusion; and responsible innovation, Anadolu Agency reports.
US regulators, such as the Securities and Exchange Commission (SEC) and Commodity Futures Trading Commission (CFTC), are asked to "aggressively pursue investigations and enforcement actions against unlawful practices in the digital assets space."
Consumer Financial Protection Bureau (CFPB) and Federal Trade Commission (FTC) are also encouraged to "redouble their efforts to monitor consumer complaints and to enforce against unfair, deceptive, or abusive practices."
The Treasury Department will complete an illicit finance risk assessment on decentralized finance by the end of February 2023 and an assessment on non-fungible tokens by July 2023, according to the statement.
Relevant government departments and agencies are required to continue to expose and disrupt illicit actors and address the abuse of digital assets, in order to hold cybercriminals responsible for their illicit activity and identify national security risks, it added.
The administration also stressed the importance of developing a US central bank digital currency (CBDC), a digital form of the American dollar, and listed the benefits of a CBDC as an efficient payment system, promoting further technological innovation, and enabling faster cross-border transactions.
After the release of the framework, the price of Bitcoin briefly dove to $19,484 at 9.59 a.m. EDT before climbing back above $19,600 at 10.22 a.m. EDT for a daily loss of 2%.