On the same day the US Federal Reserve Board issued a new policy statement on banks engaging in crypto activity, several White House advisors posted a note on the “Administration’s Roadmap to Mitigate Cryptocurrencies’ Risks.
The post pointed at the “tough year” for crypto, referencing the algorithmic stablecoin debacle of TerraUSD and alluding to the collapse of FTX. While noting that crypto contagion has not filtered into the broader financial markets, now is a time to ensure crypto cannot cause bigger problems.
Authored by Brian Deese, Arati Prabhakar, Cecilia Rouse, and Jake Sullivan, the officials state that the events of the past year show that more oversight of crypto, not less, is needed.
The officials said that in the coming months, the Biden administration will “unveil priorities for digital assets research and development,” which will help protect consumers by default.
At the same time, the White House called on Congress to empower regulators with greater oversight of digital assets. As the House is now under the control of the Republicans, the officials worry that “Congress could make our jobs harder.”
“It would be a grave mistake to enact legislation that reverses course and deepens the ties between cryptocurrencies and the broader financial system.”
While reaffirming its support of innovation, clearly, the administration is taking a more cautious approach to crypto.