Critics claimed the Biden administration’s reports focused on environmental concerns over crypto’s energy consumption and illicit uses rather than the technology’s benefits.
Members of the crypto space and advocacy groups reacted to United States President Joe Biden’s administration releasing a regulatory framework on digital assets, with many suggesting the White House focused on the potential negative aspects of crypto.
In a Friday announcement, the White House said that federal agencies and departments had submitted nine reports as required by Biden’s executive order on crypto from March. Among the information in the fact sheet included policy objectives for a U.S. central bank digital currency, ways to mitigate the possible impact of crypto’s energy usage on the climate, regulatory aims for enforcement actions, rules to address risks and consumer protection.
The Biden administration said that the Treasury Department will report on an “illicit finance risk assessment on decentralized finance” by February 2023, adding federal agencies will “continue to expose and disrupt illicit actors and address the abuse of digital assets.” In addition, the White House said it would support payment systems akin to FedNow, which the Federal Reserve planned to launch in 2023.
Crypto analyst Dylan LeClair and MicroStrategy co-founder Michael Saylor both criticized the administration’s stance on Twitter, claiming it was using environmental concerns as a pretext for extending its control over digital assets:
“If you don’t like how someone is using energy, pay a higher price than them […] No amount of hysteric screeching about climate change will stop the next block from being mined.”
“Today’s reports and summaries from the Biden administration’s executive order on digital assets are a missed opportunity to cement U.S. crypto leadership,” said Kristin Smith, executive director of the U.S.-based Blockchain Association. “While intended to be part of a broader government and stakeholder effort to bring better regulation to crypto assets, these reports focus on risks — not opportunities — and omit substantive recommendations on how the United States can promote its burgeoning crypto industry.”
The White House’s proposed framework is a fucking disgrace.
– Clear attack on proof-of-work by implying they will set environmental standards for mining.
– Pushing FedNow over crypto
– Framing everything as a potential scam or threat
– Harping on volatility and consumer risk
— The Wolf Of All Streets (@scottmelker) September 16, 2022
Speaking to Cointelegraph, Sheila Warren of the Crypto Council for Innovation said the policy recommendations seemed to be based on an “outdated and unbalanced understanding” of crypto, which could leave the details to be determined by other lawmakers or the next administration:
“In the hearing yesterday [on regulating crypto], many seemed worried about other countries overtaking the US. Regulation by enforcement is not regulatory clarity. If we regulate by enforcement, it also gives other countries a clear runway to figure out how the tech works for their interests, which may be contrary to the US’.”
The reports on establishing a comprehensive regulatory framework for cryptocurrencies in the U.S. were some of the first required since President Biden announced the order in March, but the work is far from over. The Treasury Department and Fed will continue to research the implications of releasing a digital dollar. The White House said the Financial Stability Oversight Council will publish a report in October on the financial-stability risks of digital assets and related regulatory gaps.