Washington said in a now-deleted announcement that it was set to change the way it regulates cryptoassets – following speculation and leaks claiming that intensified policies are on their way. Observers have responded by warning that short-term volatility may ensue in the crypto markets, with many people looking to offload assets in a forthcoming “really rough ride” for tokens.
In January, media outlets such as Bloomberg cited “sources” close to the matter as stating that the President Joe Biden administration wanted to unveil regulatory changes. But with senior lawmakers recently claiming that Russia will attempt to use crypto to evade economic sanctions, the government has faced fresh calls to police the sector.
The Treasury had initially published a press release on crypto regulation but soon removed it. While available, it stated that Biden had issued a “historic” executive order “on digital assets.” The order instructed federal agencies to report back to the government on their efforts as part of what the Treasury called a “coordinated and comprehensive approach to digital asset policy.”
The Treasury Secretary Janet Yellen was quoted as stating:
“This approach will support responsible innovation that could result in substantial benefits for the nation, consumers, and businesses. It will also address risks related to illicit finance, protecting consumers and investors, and preventing threats to the financial system and broader economy.”
The order also outlined the following measures:
- the Treasury will partner with other government agencies to co-author a “report on the future of money and payment systems”;
- the Financial Stability Oversight Council will be asked to “evaluate the potential financial stability risks of digital assets and assess whether appropriate safeguards are in place”;
- the government will work with “international partner” regulators to “promote robust standards and a level playing field”.
The Treasury added that its international efforts were being launched as “the questions raised by digital assets often have important cross-border dimensions.”
The department added that it would “be guided by consumer and investor protection groups, market participants, and other leading experts.”
It claimed its efforts would result in “a fairer, more inclusive, and more efficient financial system,” but warned that its efforts would “counter illicit finance and prevent risks to financial stability and national security.”
On Twitter, the head of the crypto-focused fund Ikigai Asset Management Travis Kling predicted a rocky ride ahead for bitcoin (BTC) as new regulations take shape.
He claimed that the token could be “in for a really rough ride” with price drops and “hundreds of thousands of BTC changing hands.”
But, he added, such “events are typically cyclical bottoms,” explaining:
“There is absolutely nothing at risk right now to the medium/long-term investment case for bitcoin and the rest of this asset class. That is stronger now than it was a month ago.”
Kling concluded: “The near-term is highly uncertain and significant risks are present. But this technology and asset class are going to be tremendously important in the future.”
Meanwhile, the Treasury’s Financial Literacy Education Commission has announced that it will create a new initiative that aims to inform the general public about the potential risks of investing in cryptoassets.
Nellie Liang, the Treasury’s Undersecretary for Domestic Finance, told Reuters that “populations that have limited access to mainstream financial services” is “a key group the Treasury will look to reach” with its education efforts.
Liang was quoted as stating:
“We’re hearing more and more about investors and households who are purchasing crypto assets, and we recognize the complexity of how some of these assets operate. It felt like this is an area also where more education and more awareness could be helpful.”
The commission relies on input from 20 different government agencies, including the regulatory Securities and Exchange Commission (SEC).
____
Learn more:
– These Are the Latest Crypto Regulatory Moves by US and EU
– Fed Will ‘Proceed Carefully’ with Rate Hikes Despite Ukraine War – Chair Powell
– Ukraine War Raises Questions About the ‘End of Monetary Regime’ and Role of Bitcoin
– Washington, Europe Vow to Target Russian Crypto Sanctions Evasion Efforts
– Crypto Can Better Deter Sanction Evasion Compared to TradFi – Coinbase
– US Fed Wants Answers To 22 Questions About Digital Dollar
– US Regulator Launches Probe Into NFT Sales
Credit: Source link
