![]() “History has shown that, without adequate safeguards, forms of private money have the potential to pose risks to consumers and the financial system,” said Nellie Liang, undersecretary for domestic finance. ![]() On Tuesday, the Treasury Department said its financial literacy arm would work to develop consumer-friendly materials to help people “make informed choices about digital assets.” “As crypto becomes more integrated into our financial system it creates vulnerabilities not just to those who are investing in crypto but for everybody who participates in our economy.” “I think crypto is a place where we should be putting the brakes on this innovation until it’s better understood,” she said. Katherine Dowling, general counsel for Bitwise Asset Management, a cryptocurrency asset management firm, said an executive order that provides more legal clarity on government oversight would be “a long term positive for crypto.”īut Hilary Allen, a financial regulation professor at American University, cautioned against moving too fast to embrace cryptocurrencies. ![]() More than 100 countries have begun or are piloting their own digital sovereign currency, according to the White House. The executive order had been widely anticipated by the finance industry, crypto traders, speculators and lawmakers who have compared the cryptocurrency market to the Wild West. He added that China and Russia were looking at crypto and building their own currency. has an interest in growing financial innovation,” Zarazinksi said. Some participants in digital currency welcome the idea of more government involvement with crypto.Īdam Zarazinski, CEO of Inca Digital, a crypto data company that does work for several federal agencies, said the order presents the opportunity to provide “new approaches to finance.” Last week, Liang told Yahoo Finance Treasury “absolutely support an urgent study of CBDC,” but stopped short of outright endorsing one.Treasury Secretary Janet Yellen said last week that “many participants in the cryptocurrency networks are subjected to anti-money laundering sanctions” and that the industry is not “completely one where things can be evaded.”Īs for the Federal Reserve getting involved with digital assets, the central bank issued a paper in January that said a digital currency “would best serve the needs” of the country through a model in which banks or payment firms create accounts or digital wallets. The executive order offers the White House, Treasury and other members of the government the opportunity to weigh in on a digital dollar, a framework for which the Fed unveiled in January. The White House is putting together an executive order for cryptocurrencies that could be released as early as February, Bloomberg reported Friday. The State Department, Treasury, Commerce Department and USAID will work to create a framework for interagency international engagement with foreign counterparts in an international forum to enhance the adoption of digital assets and standardize rules. The government will also look at coordinating with other countries around the world to standardize rules for crypto. The Office of Science and Technology policy will submit a report to the president on digital distributed ledger technology within 180 days, with an update on DLT and its impact on the environment in 545 days. The FTC Chairman and Director of the CFPB will also be asked to look at privacy issues potentially created for digital assets. President Joe Biden signed an executive order on Wednesday calling on the government to examine the risks and benefits of cryptocurrencies. Treasury in consultation with the Securities and Exchange Commission, the Commodities Futures and Trading Commission and federal banking agencies will be in charge of developing that report to the president on how to protect against risks to cryptocurrencies. The order will also look at measures to protect consumers, investors and businesses. The move comes as Bloomberg News reported on Wednesday that a rift has developed between the White House and Treasury over crypto regulation, but a Treasury official disputed the account as “inaccurate.” The administration is engaged in a wide-ranging effort to regulate the sector, with the FBI forming a new crypto unit led by a seasoned computer crimes prosecutor. Meanwhile, the Director of the Office of Science and Tech policy will do a technical evaluation of what might be needed to support a CBDC system. President Biden is expected to issue an executive order next week directing agencies across the government to study cryptocurrencies and a central bank digital currency (CBDC), and come up with a government-wide strategy to regulate digital assets.Īccording to an administration official familiar with the matter, the forthcoming directive will commission a study of a CBDC and ask a range of agencies – including the Departments of Treasury, State, Justice and Homeland Security – to develop a report on the future of money and payment systems.
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