U.S. President Joe Biden’s administration urged Congress to “step up efforts” on oversight of the digital asset market.
“Our focus is on protecting investor interests, holding bad players accountable, and ensuring that cryptocurrencies cannot undermine financial stability,” the White House said.
Officials stressed that they had developed a vision for “safe and responsible development of digital assets” in 2022. The administration also noted efforts by federal agencies to raise investor awareness.
According to the press release, in the “coming months,” the White House intends to name priority areas of research and development that will allow the underlying cryptocurrency technology to “protect consumers by default.”
“Congress should also step up its efforts. For example, [lawmakers] should expand regulatory authority to prevent misuse of customer assets and mitigate conflicts of interest,” the statement said.
Officials also suggested strengthening transparency and disclosure requirements for companies in the cryptocurrency industry, increasing penalties for violating financial market rules and cooperating more closely with international law enforcement agencies. The White House noted that under certain conditions, Congressional action could “exacerbate risks to investors and the monetary system” and make it difficult for government agencies to operate.
“The legislation should not encourage basic institutions like pension funds to dive headfirst into the cryptocurrency markets. It would be a serious mistake to pass acts that would reverse course and deepen the connection between digital assets and the rest of the financial system,” the press release said.
Officials added that limited institutional access to cryptocurrencies prevented the “contagion” from spreading to traditional markets in 2022.
Recall, the White House projected that an additional $11 billion will flow into the U.S. budget by 2032 as a result of expanded tax reporting requirements for digital assets.
