The White House has released a plan of action requesting that authorities step up enforcement and strengthen efforts to control the cryptocurrency industry.

The Biden Administration outlined its strategy for addressing potential dangers associated with cryptocurrencies in a blog post on Friday. The plan includes increased enforcement by authorities and calls for Congress to take a more active role in regulating the industry.

Roadmap To Mitigate Cryptocurrency Risks:

The Biden Administration has released a framework for the development of digital assets. The Framework aims to ensure safety and responsibility while addressing the risks posed by cryptocurrencies. It recognizes the potential benefits of cryptocurrency technologies in terms of faster, cheaper, and safer payments.

The Framework also highlights the risks, such as entities ignoring financial regulations and basic risk controls, misleading consumers, committing fraud, and poor cybersecurity. And the involvement of North Korea in stealing over a billion dollars to fund its missile program.

The banking agencies issued guidance on separating risky digital assets from the banking system. Government agencies plan to launch public awareness programs to inform consumers about the risks of investing in cryptocurrencies.

The Administration encourages regulators to continue their efforts, including measures to address and limit financial institutions’ exposure to the dangers of digital assets.

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The Administration considers an error to permit organizations such as pension funds to invest in the cryptocurrency markets. It would strengthen the connection between cryptocurrencies and the broader financial system and raise systemic risks. They urged Congress not to pass laws that would deepen these ties.

The White House advised that :

“At President Biden’s direction, we have spent the past year identifying the risks of cryptocurrencies and acting to mitigate them using the authorities that the Executive Branch has.”

Risks Associated With Legislation

Congressional action would be beneficial, but it could also make it difficult for the Administration to address the risks. Legislation should not allow mainstream institutions like pension funds to invest heavily in cryptocurrency markets.

In the past year, the limited exposure of traditional financial institutions to cryptocurrencies has prevented them from spreading turmoil to the broader financial system. It would be a severe mistake to pass laws that strengthen the connection between cryptocurrencies and the more comprehensive financial plan.

The Administration supports new technologies that make financial services more efficient, but they need to be secure. They will work on developing a framework for digital assets and work with Congress to put safeguards in place so the new digital economy benefits everyone.