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The White House Wants to Regulate Crypto. Here’s What Small Business Owners Need to Know


The Biden administration on Friday issued a framework for regulating cryptocurrencies and other digital assets, marking the first time that the executive branch has taken a clear stance on the matter. 

The White House fact sheet presents a handful of key concerns, ranging from “protecting consumers, investors and businesses” to “promoting access to safe, affordable, financial services.” It even talks about exploring a U.S. central bank digital currency.

The framework assembles the findings of nine reports presented to the White House in response to an executive order issued in March. In the time since, the sector has seen a collapse in both the value of nearly all crypto assets, and the failing of many companies that sell or create crypto assets. Bitcoin has dropped in value by more than two-thirds since its peak in November 2021, and Crypto lending services platform BlockFi, which was valued at $3 billion in a March investment round–with revenue numbers so strong it topped the Inc. 5000 list of fastest growing companies in America this year–is rumored to be on the market for less than $25 million.

For the vast majority of companies, which either don’t use cryptocurrencies at all or use them only as a medium of exchange, any resulting regulation shouldn’t bring much change.

For companies built to sell or create new digital assets, this is a clear signal that–at least as far as the White House is concerned–the Wild West days of acting more or less without government oversight are severely numbered. The framework asks both the Securities and Exchange Commission and the Commodity Futures Trading Commission to step up their efforts to enforce existing laws and regulations in the space–and to issue new rules as deemed appropriate, while sharing data on consumer complaints.

The White House also said it will deploy public-awareness efforts through the Financial Literacy Education Commission “to help consumers understand the risks involved with digital assets, identify common fraudulent practices, and learn how to report misconduct.” The framework also announces in several places an executive branch goal of reducing the environmental impacts of cryptocurrency.

Alongside that is an effort to advance the U.S. as a leader in digital assets, including cryptocurrencies. The White House is creating a “Digital Assets Research and Development Agenda” to kickstart fundamental research, and instructs the Treasury and financial regulators to assist companies in developing financial technologies through information-sharing and other forms of collaboration, as well as working in the international arena to “leverage U.S. positions in international organizations to message U.S. values related to digital assets.”

The framework also clarifies efforts to reassert the dollar in digital form as a viable alternative to cryptocurrency. The viability of cryptocurrency as a medium of exchange has long rested upon perceived shortcomings of government-issued currency, such as payment systems that are slow and cumbersome relative to cryptocurrency, even as dollars mostly trade hands these days as electronic records, and not hard cash. The White House wants the federal government to make the digital dollar a fuller and more customer-responsive part of American commerce, such as through instant payment systems, regulating nonbank payment providers, and creating procedures for international exchange of digital dollars. The framework ends with a call for considering a U.S. central bank digital currency.



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