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Here is the White House encryption framework

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Here is the White House encryption framework

With each passing day, it becomes more likely that centralized entities will regulate the decentralized crypto industry. The White House takes a tough stance on crypto companies. The Biden Administration proposed new rules to regulate the booming market and urges regulators to aggressively pursue those who break the law.

The White House has released its first framework on what U.S. crypto regulation should look like under the Biden administration. This framework suggests ways that would make borderless digital transactions simpler and easier to track. It also provides methods for reducing fraudulent activities associated with digital assets.

White House Releases First-Ever Crypto Regulatory Framework

The new White House orders build on the strength of existing watchdogs such as the Securities and Exchange Commission and the Commodity Futures Trading Commission. However, no specific body is running the show at this time.

Moreover, the long-awaited policy has caught the attention of both the crypto industry and investors in this premier asset class. The industry did not like the document, because it is too obvious that decision-makers prioritize safety and law enforcement above everything else.

The framework follows an executive order issued in March by President Joe Biden, which called on federal agencies to examine the risks and benefits of cryptocurrencies and issue official reports on their findings.

Digital assets present potential opportunities to strengthen US leadership in the global financial system and stay at the technology frontier […] But they also pose real risks, as evidenced by recent events in the crypto markets. The May crash of a so-called stablecoin and subsequent wave of insolvencies wiped out more than $600 billion in investor and consumer funds.

Statement from the White House

The news was not unexpected, and bitcoin and ethereal fell around 10%, suggesting that the cryptocurrency crisis is far from over. On Monday, bitcoin fell below $19,000, a stark contrast to its all-time high of $69,000 in November. Yesterday’s Federal Reserve rate hike added to the downside.

Brian Deese, director of the National Economic Council, and national security adviser Jake Sullivan said in a statement that the new guidelines are intended to ensure that America is a chief in the digital asset ecosystem, both at home and abroad.

Important Takeaways from the White House Crypto Framework

The new regulations are intended to achieve six distinct goals: improving consumer and investor protection, promoting financial stability, combating illicit finance, strengthening U.S. leadership in the global financial system and economic competitiveness, expanding financial inclusion, and preserve responsible innovation.

The White House said the new crypto rules would protect customers and investors by preventing sellers from misinforming buyers about the dangers of trading with digital assets and ensuring they follow existing laws.

The section of the White House’s new framework on crypto regulation that stands out focuses on stamping out illegal activity in the industry — and the proposed measures seem to have real bite.

The President will consider whether to ask Congress to amend the Bank Secrecy Act, anti-whistleblower laws, and laws against unlicensed money transmission to explicitly apply to digital asset service providers – including digital asset exchanges and non-fungible tokens (NFT) platforms.

The White House Fact Sheet

.In the digital asset industry, crime is common. At the start of 2021 alone, more than $1 billion worth of crypto was lost to fraud, according to research by the Federal Trade Commission.

The administration also urged the Securities and Exchange Commission (SEC) and Commodity Future Trading Commission (CFTC) to “aggressively pursue investigations and enforcement action against illegal practices in the digital asset space.”

The US SEC and the CFTC have been in a power struggle over which regulator should regulate the crypto industry. That being said, the White House has also encouraged agencies to issue policies and regulations to address current and emerging risks of digital assets.

The crypto framework is interested in the CBDC

The most essential part of the White House framework is dedicated to central bank digital currencies (CBDC). He revealed that the administration has already established policy goals for a US CBDC system and will present them in writing to Congress. However, further study of the technological underpinnings of this system is needed.

The new White House framework underscores the fact that a USA CBDC could enable a more efficient payment system provides a basis for new technological innovations, facilitates faster cross-border transactions and is environmentally sustainable.

The report indicates that the CBDC could contribute to financial inclusion and fairness by enabling access to a wide range of consumers. To that end, the administration urges the Fed to continue its research, experimentation, and evaluation of a CBDC.

The Office of Science and Technology Policy submitted a report analyzing 18 central bank digital currency designs that could be used in the United States. The report looked at choices in six categories: who can use it, how it’s governed, how secure it is, how transactions are conducted, what data is collected, and how the system can be adjusted.

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