The Biden Administration released an extensive statement announcing their intention to establish a cryptocurrency legal framework in the coming months. The article, which the White House released, addressed the risks associated with the administration’s creation of the first-ever framework for developing digital assets.

The statement states briefly; “While congressional action in these areas would be welcome, Congress could also make our jobs harder and worsen risks to investors and to the financial system. Legislation should not greenlight mainstream institutions, like pension funds, to dive headlong into cryptocurrency markets. In the past year, traditional financial institutions’ limited exposure to cryptocurrencies has prevented turmoil in cryptocurrencies from infecting the broader financial system. It would be a grave mistake to enact legislation that reverses course and deepens the ties between cryptocurrencies and the broader financial system.” 

The Administration fully endorses responsible technological advancements that reduce cost, increase speed, increase safety, and increase the accessibility of financial services. But in order to enjoy these advantages, new technologies require equivalent security measures. Protections will guarantee that new technologies are safe and beneficial to everyone, ensuring that the new digital economy benefits everyone, not just a select few.

The administration stated, “We will continue to advance the digital assets framework we have created and collaborate with Congress to accomplish these objectives in order to put the proper safeguards in place.”

According to the statement, the administration spent the past year identifying the risks of cryptocurrencies and acting to mitigate them using the authorities that the Executive Branch has.

The year 2022 was challenging for the market for digital assets. Numerous investors faced disaster as a result of falling prices and the exposure of bad actors. Regulating bodies and governmental entities have since focused on the industry and the best way to handle the complex issue of regulation.

The White House has now announced that it will deal with the same problem. The Biden Administration said in a statement that they will set up the cryptocurrency legal framework in the upcoming months. Moreover, they claimed that their actions were the result of a year of work.

The statement notes that the aforementioned framework, “identifies clear risks.” Addressing unnamed crypto companies that, “ignore applicable financial regulations and basic risk controls,” according to the White House. Furthermore, the framework will address cybersecurity questions, as well as cryptocurrency platforms that “mislead consumers, have conflicts of interest, fail to make adequate disclosures, or commit outright fraud.”

Conversely, the administration makes clear the desire for Congressional collaboration to maintain separation between cryptocurrencies and traditional financial systems. Stating, “It would be a grave mistake to enact legislation that reverses course and deepens the ties between cryptocurrencies and the broader financial system.”

Moreover, the statement acknowledges some agencies that “ramp up enforcement where appropriate, and issue new guidance where needed.” Yet, maintains that “the events of the past year underscore that more is needed.”Conclusively, the administration notes its intention to “keep driving forward the digital-assets framework we’ve developed,” alongside Congress.