White House Urges Regulators to 'Redouble' Crypto Oversight Efforts; Notes Study of Central Bank Digital Currency

Source: American Banker

The White House has released a series of reports, including from the Treasury Department, outlining a federal plan for digital-asset regulation. 

The reports — in response to President Biden's March 9 executive order that called for Treasury and other agencies to recommend reforms — urge regulators to continue acting vigilantly when it comes to cryptocurrency transactions. Regulators, particularly banking regulators, have emphasized that their cautious approach to crypto has helped insulate the U.S. economy and traditional financial institutions from the volatility in cryptocurrency values that occurred earlier this year. 

Of note, the Treasury will lead an interagency working group that will consider the potential implications of a central bank digital currency (CBDC) and will share technical expertise across the government. In the working group, leaders of the Federal Reserve, National Economic Council, the National Security Council, the Office of Science and Technology Policy and the Treasury will meet "regularly." 

The Biden administration is also recommending that agencies encourage the adoption of instant payment systems like FedNow, and that financial regulators should provide innovative U.S. firms with regulatory guidance and technical assistance. 

Biden will also consider asking Congress to amend the Bank Secrecy Act and laws against unlicensed money transmitting to apply explicitly to digital-asset service providers, and perhaps urge Congress to raise the penalties for unlicensed money transmitting.