Hannah Lang
(Reuters) – U.S. government agencies must double down on enforcement efforts in the digital asset sector and identify crypto Weaknesses in currency regulation.
The Treasury Department will also lead a group of government agencies considering a central bank digital currency, although the White House has not approved a digital dollar.
The report was issued in response to an executive order signed this year by U.S. President Joe Biden “On Ensuring the Responsible Development of Digital Assets.”
“Innovation is one of the hallmarks of a vibrant financial system and economy, but as we have painfully learned from history, innovation without proper regulation can have a negative impact on financial systems and individuals Significant damage and injury,” Treasury Secretary Janet Yellen told reporters.
Report urges regulators such as the U.S. Securities and Exchange Commission (SEC) and Commodity Futures Trading Commission (CFTC) to issue guidance and rules addressing risks to the digital asset ecosystem, including the potential use of cryptocurrencies
The White House also said that Biden would consider asking Congress to amend the Bank Secrecy Act (BSA) to apply to digital asset service providers, including cryptocurrency exchanges and non-fungible tokens or NFTs . The BSA requires lenders to report suspicious transactions to the Treasury.
Biden will also consider agency recommendations for a federal framework to oversee non-bank payment providers.
Cryptocurrencies surged to $3 trillion in value last year, but the industry has seen prices fall in recent months as rising interest rates have driven investors out of risky assets.
Brian Deese, director of the National Economic Council, said that without proper oversight, financial stability and national security could be compromised.
“Cryptocurrencies need to be regulated if digital assets are to play the role we believe can foster innovation and support our economic and technological competitiveness,” he said.
