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US White House Calls For Tighter Crypto Controls

 |  September 19, 2022

The US White House is looking to rein in crypto. It’s hard not to come to that conclusion when looking over the trio of reports it released on Sept. 16, and especially the Fact Sheet the White House put out announcing its goals for the first major responses to the president’s executive order calling for the creation of a legal framework for cryptocurrencies and other digital assets.

It encourages regulators including the Securities and Exchange Commission (SEC) and Commodity Futures Trading Commission (CFTC) to “aggressively pursue investigations and enforcement actions against unlawful practices in the digital assets space.”

And it orders the Consumer Financial Protection Bureau (CFPB) and Federal Trade Commission (FTC) to “redouble their efforts to monitor consumer complaints and to enforce against unfair, deceptive, or abusive practices.”

In both cases, those phrases were emphasized with bold type. The same applies to the Financial Literacy Education Commission (FLEC), which the Treasury Department told to “lead public-awareness efforts to help consumers understand the risks involved with digital assets,” as well as identify common frauds in the industry, and learn how to report it and other types of misconduct.

Then there was the extensive support innovative non-crypto instant payments systems like FedNow — The Clearing House’s RTP Network was also called out in one of the reports on The Future of Money and Payments,” which also looked into stablecoins, a type of cryptocurrency whose benefits include instant settlement capabilities.

Following that came fostering financial stability — mitigating cyber vulnerabilities and identifying and tracking emerging strategic risks.

Emphasis Matters

Regardless of the specifics, when it comes to regulating cryptocurrencies, the argument in the U.S. has generally come down to encouraging innovation versus protecting consumers.

It’s rarely an either-or situation: With very few exceptions, elected officials and regulators want to do both. It’s just that they disagree on how much leeway cryptocurrency entrepreneurs should have. Emphasis matters.

Looking at the Treasury Department’s trio of cryptocurrency and digital asset reports released on Friday (Sept. 16), its fairly easy to see where the emphasis lies.

One likely reason is that the report does not see cryptocurrencies having truly succeeded in revolutionizing anything in the payment or financial space yet — which is fair, because they haven’t.