The Biden administration has unveiled the first comprehensive framework for the responsible management of digital assets such as crypto.
Highlights of the framework include the Biden administration's stance on how crypto organisations should evolve to facilitate smooth borderless transactions with an emphasis on eliminating crypto theft and scams prevalent in the crypto space.
The regulatory framework intends to bring a certain degree of respite to the emerging crypto sector.
What's the new regulatory framework for crypto all about?
The new framework emphasises preventing crypto hacks and scams through the efficient management of cryptocurrencies, while also accentuating the need for organisations to evolve and support borderless crypto transactions.
US authorities will increase money laundering penalties and change key federal statutes to allow the Department of Justice to prosecute digital asset crimes in any country.
From the statement:
The United States will continue to monitor the development of the digital assets sector and its associated illicit financing risks to identify any gaps in our legal, regulatory, and supervisory regimes. As part of this effort, the Treasury will complete an illicit finance risk assessment on decentralized finance by the end of February 2023 and an assessment on non-fungible tokens by July 2023
In addition, the framework also intends to explore the dollar-backed CBDC development to bolster its payment mechanism.
It (CBDC) could enable a payment system that is more efficient, provides a foundation for further technological innovation, facilitates faster cross-border transactions, and is environmentally sustainable. It could promote financial inclusion and equity by enabling access for a broad set of consumers
Other than emphasising illicit financing and CBDC development, the framework also stresses prioritising safe and affordable financial services alongside protecting consumer and investor interests and stakes.
The framework was initially proposed in March 2022 when the Biden administration invited several federal agencies and organisations to weigh their opinions on cyber crimes and outline major crypto risks and benefits with the end goal of drafting a strong regulatory framework for crypto.
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