US President Biden’s administration has been briefed by Treasury Department officials about the risks brought about by crypto currencies. Regulators in the United States have generally been working towards increased certainty in terms of a crypto framework.
As the world of crypto currencies continues to grow and evolve, so do the challenges in mitigating the risks involved in digital assets. According to the Washington Post, the White House has been working with officials from the US Treasury Department to highlight and study the bigger issues surrounding crypto currencies and how best to tackle them.
Federal regulators from the Office of the Comptroller of the Currency (OCC) and the Consumer Financial Protection Bureau (CFPB) are also getting involved.
Regulatory issues surrounding crypto trading
The goal of these studies is to identify potential gaps in oversight such as whether crypto currencies can be utilized to fund illicit, illegal, or even terrorist activities. Additionally, one of the major reasons for the increased scrutiny is targeting those who are using digital currency to dodge federal taxes.
Efforts have been doubled recently in response to the market volatility. Regulators apparently don’t believe the swings are a threat to the stability of the financial market as a whole, though the risk is enough that constant monitoring will be required.
In response to these issues, US bank officials and lawmakers have begun working together to hash out policies that may alter crypto markets significantly. The White House has already passed legislation that requires federal regulators to research and shed light on crypto rules as they currently stand.
Different departments collaborating
On Monday, Federal Reserve Governor Lael Brainard published an article that suggests a central bank digital currency (CBDC) could minimize some of these regulatory issues. Brainard believes that a government-backed digital currency could provide several relevant positives for both crypto traders and government entities alike.
The Securities and Exchange Commission (SEC) Chairman Gary Gensler is also sharing concerns and possible solutions to the regulatory issues. Gensler spoke at the recent FINRA conference and said that Congress needs to do more to make crypto rules less confusing and more encompassing.