Industry players stated that the highly anticipated reports on digital assets from the Biden administration “kick off the road” to crypto regulation. These reports are part the administration’s effort to coordinate federal departments and agencies that deal with cryptocurrency issues.
Republican lawmakers and cryptocurrency industry groups criticized a series of highly anticipated reports on digital assets from the Biden administration. They said the documents “miss the mark” as well as “kick the can down” regarding regulation.
Friday morning, the Democratic administration released several reports that examined digital assets. This is part of an effort to unify federal agencies and departments that deal with cryptocurrency.
White House is laying out the groundwork for digital assets
Brian Deese, top White House economic advisor, stated that the White House is “laying groundwork for an intelligent and comprehensive approach to mitigating the digital assets’ acute risk and–where proved–harnessing them benefits”.
Deese, director of the National Economic Council, stated that “We remain committed in working with allies and partners to shape the future ecosystem,”
Deese and many others in the digital asset community criticized the effort, saying that it did not provide a clear path forward for U.S. policy toward digital assets. Given the administration’s call to regulators to “aggressively pursue enforcement actions within this industry,” the reaction is not surprising.
The reports were coordinated by officials who requested anonymity during the briefing portion on a Thursday press conference. They said that existing laws in the financial sector are sufficient to regulate digital assets. This is the exact opposite message being sent by Washington industry groups, although senior officials spoke out in support of clearer guidance regarding the still-nascent asset category.
Blockchain association says the report has no substance
Blockchain Association, one the most important groups in the digital asset industry, stated that the new reports do not contain “substantive recommendations.”
Kristin Smith, Executive Director of U.S. Crypto Leadership, called the reports “a missed chance to cement U.S. cryptocurrency leadership” in a statement. She also criticised them for being too focused on the risks associated with cryptocurrencies.
Sheila Warren, CEO of Crypto Council for Innovation, stated that the reports were “outdated” and “unbalanced”. She also criticised what she perceived as a lack clear policy recommendations.
The new reports were cheered by at least one company within the industry.
“We are happy that the administration is directing Federal agencies to better enforce existing law on the books,” stated Ben Gray, general counsel and chief compliance officer at Paxos Trust Company in a statement.
Rep. Jim Himes is a crypto-friendly lawmaker and has proposed legislation to create a digital currency. He also praised these reports in a telephone interview with The Block.
Himes said, “I’m happy for the momentum.” “I didn’t leave with a lot of recommendations or specific suggestions.”
Republicans were not impressed with the report
Rep. Patrick McHenry is the top Republican in the House Financial Services Committee. He criticized the reports for not indicating more concrete actions.
McHenry stated in a statement that reports are not meant to replace legislative clarity. This innovative technology, if governed by clear rules, can revolutionize financial markets and modernize the infrastructure of our payments system. It also offers consumers new opportunities.
McHenry’s Republican counterpart at the Senate also echoed this criticism.
“While I applaud the Biden administration’s engagement in digital assets, true regulatory transparency will require more than just reports,” Senator Pat Toomey (R. Pa.), the top Republican on Senate Banking Committee said in a statement. “What is clearly required is a comprehensive, tailored framework which allows these new technologies thrive with appropriate guardrails to consumers.
McHenry and Toomey also attacked the decision of the administration to not support stablecoin legislation.
Joe Biden’s digital asset reports needs a conclusion
McHenry stated that there was no acknowledgement in these reports of the positive effects stablecoins can have on our payments system or consumers if they are issued within a clear regulatory framework.
McHenry attacked McHenry’s decision to form an interagency group to prepare for a digital dollar, should it be created by the Federal Reserve.
McHenry stated that “Republicans have always maintained that the benefits of a U.S. CBDC potential must outweigh any risks–these reports fail make the case.”
Himes, a proponent for a digital currency, felt the opposite. He saw Congress as playing a larger role than reports might suggest, just like McHenry or Toomey.
He stated, “I believe that Congress is the true action right now.”