On Friday, the White House posted a statement on crypto and the administration’s policy pertaining to digital asset innovation. In recent months, multiple crypto firms have filed for bankruptcy and an algorithmic stablecoin, TerraUSD, ended up not being very stable – destroying holder value. Earlier statements emanating from the Biden White House appeared to embrace digital asset innovation but the recent comment appears to pump the brakes on crypto as fears of contagion spilling into traditional financial services increase. On the same day, the US Federal Reserve Board issued a policy statement cautioning banks on their activities regarding crypto in what appeared to be a coordinated policy announcement.
CI has received a comment from the global Crypto Council for Innovation, an association that advocates on behalf of the digital asset industry
Sheila Warren, CEO of the Crypto Council, had this to say on the White House’s statement:
“This is the first media statement from the White House on the subject since the events in late 2022. It’s anchored in the public policy goals we would expect from the executive branch following such events: holding bad actors accountable, protecting investors, and ensuring financial stability. It also acknowledges that human behavior leading to recent failures is not new or unique to crypto.
This statement comes alongside the OSTP RFI, which we are encouraged by. The RFI recognizes “responsible innovation in digital assets could provide significant benefits,” and that research is needed to spur further innovations that are “environmentally friendly consensus mechanisms” and that build fraud resistance into applications.
A research-driven approach like that described will help ensure that the new opportunities afforded by this innovation to further public policy goals are considered. Technology can help the government achieve its goals, and we hope the next statement will be built off of these findings, as well as further conversations with technical experts and industry leaders.
At the same time, we do see in the statement some of the usual thoughts around crypto only having a negative side. We all agree that bad actors must be held accountable, but what the events of 2022 also show is that regulation by enforcement has not worked to achieve this goal. We continue to believe that this approach comes at the expense of consumers, companies, and innovation and are disappointed that there is a suggestion of support for continued enforcement without clear rules of the road.
It’s important to have careful, evidence-based conversations and get legislation right. We support the administration’s call to Congress to establish appropriate guardrails and transparency for those participating in the digital assets space.
The statement highlights a critical need that the industry and other leaders can agree on – a clear regulatory framework for digital assets in the United States that will protect American consumers and preserve innovation within the United States.”
The Request for Information (RFI) is requesting public comments to help with research and development related to digital assets. The Science and Technology Policy Office in the White House appears to be gathering more information once again as it attempts to chart a difficult path of encouraging innovation while protecting consumers as well as guarding against systemic risk.
The RFI is accepting comments from the public until March 3, 2023.