White House establishes framework for digital assets

White House

The White House has launched a framework for the development of digital assets, which is the first of its kind in the US.

According to Finextra, the framework was put together for the ‘responsible development’ of digital assets that includes a ‘more aggressive push by regulators to take on fraud in the sector’.

The framework also comes half a year after President Biden issued an executive order on the oversight of cryptocurrencies and is based on reports with recommendations on protecting consumers, investors, business financial stability, the environment and national security.

The report calls for the Securities and Exchange Commission and the CFTC to ‘aggressively pursue investigations and enforcement actions against unlawful practices in the digital assets space’ as well as asking the FTC and CFPB to strengthen its efforts to monitor consumer complaints.

Finextra highlighted that President Biden will also consider asking Congress to amend the Bank Secrecy Act to explicitly apply to digital asset service providers. The US Treasury is also set to complete an illicit finance risk assessment on decentralised finance by the end of February 2023 and an assessment on NFTs by July 2023.

The White House has said it wants to ‘foster responsible digital asset innovation’ despite the need to crackdown on fraud.

The Office of Science and Technology Policy and NSF will develop a Digital Assets Research and Development Agenda. In addition, regulators are being encouraged to provide firms in the space with guidance and best-practice information.

Janet Yellen – US Secretary of the Treasury – said, “The reports clearly identify the real challenges and risks of digital assets used for financial services. At the same time, if these risks are mitigated, digital assets and other emerging technologies could offer significant opportunities.

“These reports and their recommendations provide a strong foundation for policymakers as we work to realise the potential benefits of digital assets and to mitigate and minimise the risks.”

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