A trio of reports released Friday morning by the Biden administration represent a key step in the federal government's efforts to lay out a comprehensive approach for American crypto policy and oversight.
As of today, some eight publications, including the three from the Treasury, have been published since Biden's executive order. The White House characterized President Joe Biden's March executive order as "outlining the first ever, whole-of-government approach to addressing the risks and harnessing the potential benefits of digital assets and their underlying technology."
The Biden administration's reports are linked below, with summaries of each report. You can also read The Block's coverage of a call from the Treasury Department to "double down" on regulation, take another step towards a digital dollar, and of the one report that's still pending: recommendations on how to plug regulatory gaps from the Financial Stability Oversight Council.
- Action Plan to Address Illicit Financial Risks of Digital Assets (Department of the Treasury): One of the three Friday reports, this release focuses on both existing and potential future efforts on anti-money laundering and illicit finance regulations as they relate to crypto. The action plan contained in the report "identifies priority and supporting actions to support this commitment in line with the priorities and supporting actions identified in the Illicit Financing Strategy specific to uncovering and mitigating the misuse of digital assets by illicit actors."
- Crypto-Assets: Implications for Consumers, Investors and Businesses (Department of the Treasury): Much of this Treasury report focuses on government recommendations on consumer protection, including calls for greater access to information about the risks of investing in digital assets.
- The Future of Money and Payments (Department of the Treasury): This expansive report focuses on the intersection of crypto, payments and the U.S. economy. Further, it touches on another area — central bank digital currencies — that was previously explored in a White House Office of Science and Technology Policy report. Indeed, the report features recommendations that focus on the broader shape of the U.S. payments ecosystem from regulatory and technology perspectives.
- Climate and Energy Implications of Crypto-assets in the United States (White House Office of Science and Technology Policy): Perhaps one of the most eagerly awaited reports given the size of the U.S. crypto mining ecosystem, this White House report sparked a wide range of commentary. In particular, its long-term call for possible restrictions on proof-of-work mining — namely, bitcoin — signaled a desire to reign in the energy costs associated with mining. The report also highlighted that certain forms of energy generation may actually create overall climate benefits. To wit: "[C]rypto-asset mining operations that capture vented methane to produce electricity can yield positive results for the climate, by converting the potent methane to CO2 during combustion."
- Policy Objectives for a U.S. Central Bank Digital Currency System (White House Office of Science and Technology Policy): This report laid out a series of objectives and policy goals for a potential U.S. CBDC, known colloquially as a digital dollar. Currently, the Federal Reserve is conducting research into this area, but such a launch would carry implications for the broader U.S. government, thus spurring the creation of "considerations related to choices and limitations that should inform the design of a U.S. CBDC system."
- Technical Evaluation of a U.S. Central Bank Digital Currency System (White House Office of Science and Technology Policy): A more expansive version of the above report, this particular release provides a greater focus on the technological aspects of a digital dollar. Among the recommendations: supporting the Fed's work by involving the National Science Foundation (NSF) and improving the overall technological infrastructure of the U.S. government.
- The Role Of Law Enforcement In Detecting, Investigating, And Prosecuting Criminal Activity Related To Digital Assets (Department of Justice): The DOJ's report provided an overview of the Department's work around cryptocurrency law enforcement to date. In addition, it contains a series of recommendations "on how to further strengthen our ability to detect, investigate, prosecute, and otherwise disrupt criminal activity."
- Responsible Advancement of U.S. Competitiveness in Digital Assets (Department of Commerce): The Commerce Department report's aim is to lay out a path toward achieving regulatory and technological leadership in the area of digital assets. "Organized around four categories, the framework details actions that, if taken, could advance the competitiveness of the U.S.-based digital asset industry and further a whole-of-government agenda for digital assets," the report's introduction notes.
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