White House Releases Crypto Regulatory Roadmap

The White House is itching for some crypto regulation.

In a new statement, the Biden administration unveiled its thoughts on the industry, its roadmap for regulation, and what it thinks Congress should be doing regarding crypto.

Thoughts On The Industry

The White House harbors mixed feelings about crypto.

On the one hand, the White House recognizes that crypto has the potential “to make payments faster, cheaper, and safer”. We do too.

But, the White House also included a paragraph about the Luna collapse, centralized exchange blowups, and North Korean hackers. Fair enough.

In many ways, the White House’s view on crypto is the same as ours… Crypto is a revolutionary technology that, right now, can be risky, often has poor security, and contains a range of bad actors.

Whether crypto grows out of this phase and into its full potential depends largely on regulation, which is what the White House discussed next.

Regulatory Framework

The White House is taking a two-pronged approach to regulation.

The first prong is their Comprehensive Framework for Responsible Development of Digital Assets released in September. The entire framework is worth a read, but the TLDR is that the White House plans to use the full power of the government to cut down on what it views as crypto’s risks: hacks, climate emissions, illicit finance, and fraud.

The second prong is increased government enforcement. Basically, the White House wants government agencies to get more active in ensuring that crypto is safe. We’re looking at you, Gensler.

Overall, nothing here that we didn’t already know.

The Role Of Congress

The most interesting part of the report is the White House’s views on Congress. They aren’t impressed with how Congress has handled crypto, and want them to step it up ASAP.The White House then gives several examples of how Congress can stop dropping the ball:

• Expand the powers of regulators

• Strengthen transparency and disclosure requirements for crypto companies

• Strengthen penalties for violating illicit finance rules and ban crypto companies from tipping off criminals

• Fund law-enforcement

• Come up with stablecoin legislation

• Destroy any legislation that would deepen the ties between TradFi and DeFi

It’s a pretty extensive list, but again, not much we haven’t seen.

The one new piece of information is the urgent request to keep the traditional finance (TradFi) industry and DeFi industry separate. That will be pretty disappointing for people in DeFi, as many believed the integration between DeFi and TradFi would play a key role in the next bull market.

Those dreams might have to be put on hold.

Concluding Thoughts

It’s natural to think the worst when you hear “White House Roadmap”. Regulators haven’t exactly been our friends over the years.

But, this particular framework isn’t all that bad for the industry.

Yes, the White House’s push for the separation of TradFi and DeFi and expanded regulatory powers is not ideal. But, would you oppose stronger transparency and disclosure requirements for centralized crypto companies after the disasters of 2022?

Ultimately, these are all just ideas still. It’s up to Congress to implement them, and considering how slowly Congress works, it will be quite a while before that happens.