The Biden administration on Friday issued its long-awaited framework for the potential regulation of cryptocurrencies, including how best to bring stability to the growing industry and protect American businesses and consumers from currency crashes and fraud.
The first-ever guidelines follow President Joe Biden’sthat called on government agencies to evaluate the risks and benefits of digital assets, including cryptocurrencies, and to explore the possibility of creating a US central bank digital currency, a type of government-controlled cryptocurrency. A total of nine reports from agencies have been submitted in the six months since.
The recommendations issued Friday include encouraging the Federal Reserve to continue its research into the possibility of creating a central bank digital currency. In addition, the Biden administration will launch an interagency working group to support the Fed’s efforts by considering policy implications of that potential, especially in regards to national security.
At the same time, the administration says it will put in place a plan for stopping the use of crypto for crimes like money laundering and in the financing of terrorism by making it easier for the government to track, trace and stop illicit cryptocurrency use, while also boosting the enforcement of sanctions.
Crypto has long been the payment form of choice of cybercriminals, because it’s designed to be largely anonymous and nearly impossible to track.
The administration also wants to better protect US consumers, investors and businesses by encouraging regulators to increase investigations of alleged digital asset market misconduct, boosting enforcement of current rules and laws and getting federal agencies to work better together.