Is The White House Really Concerned About Cryptocurrencies?

• The White House published a roadmap that will mitigate cryptocurrencies’ risks.
• The Financial Stability Oversight Council “outlined the steps in its recent report, that include addressing the risks of stablecoins.

The White House recently published a statement on implementing safeguards for cryptocurrencies. In its statement, it added about the risks that cryptocurrencies are carrying and also about last year’s multiple collapses.

Last year was not good for most of the top traded cryptocurrencies. Not only were cryptocurrencies affected from the harsh market conditions, but the major crypto entities also collapsed.

On January 27th, 2023 the White House published a roadmap that would mitigate cryptocurrencies’ risks. In its roadmap, they have noted that the year 2022 was a “tough year,” for cryptocurrencies. As in May “stablecoin,” imploded and after months, a major cryptocurrency exchange collapsed. After this sudden loss in the crypto ecosystem, many daily crypto investors suffered serious losses. The turmoil in the cryptocurrency markets has had little negative impact on the broader financial system to date. 

The White House as “an administration focused on continuing to ensure that cryptocurrencies cannot undermine financial stability, to protect investors, and to hold bad actors accountable.”

In the guidance of the U.S. President, the White House spent the past year in identifying the risks of cryptocurrencies and also acting to mitigate using the authorities that the Executive Branch has.

The experts from the administration “laid out the first-ever framework for developing digital assets in a safe, responsible way while addressing the risks they pose.” The technologies may offer multiple ways to make payments faster, cheaper, and safer, but this framework identifies “clear risks.” Moreover, cryptocurrency platforms and promoters often mislead consumers, have conflicts of interest, fail to make adequate disclosures, or commit outright fraud.

Moreover, “the agencies are using their authorities to ramp up enforcement where appropriate and issue new guidance where needed.” It also noted that last month, banking agencies issued “joint guidance on the imperative of separating risky digital assets from the banking system.”

The White House added about the poor cybersecurity across the industry that enabled the Democratic People’s Republic of Korea to steal over a billion dollars to fund its aggressive missile program.

How Government Officials are dealing with the risks?

According to the roadmap, the government agencies are now “developing public awareness programs,” to help consumers to clearly understand about the risks of buying cryptocurrencies. They are encouraging regulators to follow their footsteps.

However, the major events in the past year somewhere “underscore that more is needed.” Thus the agencies once again “doubled their efforts to fight against the fraud, including the proliferation of false or misleading claims about crypto assets being insured by the FDIC.”

Notably, the United States is heading the world by becoming a global leader in fighting money laundering, terrorist financing, and enforcement agencies to combat illicit activities involving digital assets. And in the upcoming months, the Administration will also unveil priorities for digital assets research and development, which will help the technologies powering cryptocurrencies protect consumers by default. 

Nancy J. Allen is a crypto enthusiast and believes that cryptocurrencies inspire people to be their own banks and step aside from traditional monetary exchange systems. She is also intrigued by blockchain technology and its functioning.

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