The White House unveiled its roadmap for regulating the cryptocurrency ecosystem in 2023. The Biden administration notably calls on Congress to strengthen the power of regulators to prevent platforms from abusing customer funds .
Biden administration speaks out on cryptocurrency regulation
On Friday, the White House released its roadmap for the year 2023 in terms of regulation of the cryptocurrency ecosystem. Unsurprisingly, the Biden administration is thus calling for continued efforts to regulate the industry, in the name of the usual reasons of financial stability and investor protection.
Thereby, a retrospective of the year 2022 is made on the crises experiencedwith the UST collapse and the FTX fraud in mind:
“2022 has been a tough year for cryptocurrencies. In May, a so-called “stablecoin” imploded, sparking a wave of insolvencies. A few months later, a major cryptocurrency exchange collapsed. Many ordinary investors […] suffered severe losses, but fortunately the turmoil in the cryptocurrency market has had little negative impact on the broader financial system to date. »
Regarding a hypothetical contagion from the crypto ecosystem to traditional finance, if it is true that internal crises should not spread, it will however be interesting to remember that the beginning of the bear market was, on the contrary, initiated amid a global economic downturn.
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A distinction between technology and its use
Despite a call for more regulation, we can nevertheless point out that the White House seems to be dissociating between the technological base represented by the ecosystem, and the use made of it. Indeed, it is particularly emphasized that these technologies “can offer faster, cheaper and more secure ways to make payments“.
It is also mentioned in this roadmap that if cryptocurrencies are “relatively new», the risks incurred by the behavior of certain actors are not. Said document would therefore rather target companies revolving around this industry.
Logical rules are thus required, such as a better transparency on associated risks and conflicts of interest. The Biden administration is also asking Congress to strengthen the power of regulatorsso as to prevent misuse of client funds.
It is also argued that “bad cybersecurity in industryspawned hacks that allowed North Korea to finance its ballistic program. However, on this last point, the White House forgets a priori that the hacks in question mainly concern decentralized applications which, in fact, do not depend on its jurisdiction.
Despite all these lines of conduct, it appears that the United States still lacks a clear and harmonized frameworklike the MiCA regulation which is being implemented in the European Union.
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Source: White House
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