- White House outlines steps to minimize the risks of cryptocurrencies.
- The Biden administration is committed to working with Congress to enact protective laws.
- The White House believes that mainstream institutions, like pension funds, should not be allowed to enter crypto.
On January 27, the US White House issued a statement outlining steps the administration of President Joe Biden may take to reduce the dangers posed by virtual currencies. Much of the reports were addressed to the US Congress.
The authors first highlighted the significant failures that rocked the crypto industry, including the collapse of LUNA and FTX. They wrote:
We have spent the past year identifying the risks of cryptocurrencies and acting to mitigate them using the authorities that the Executive Branch has.
The paper noted that the current administration wholeheartedly supports responsible technological innovations that make financial services cheaper, faster, safer, and more accessible such as crypto. However, it believes such new technologies need commensurate safeguards to ensure they are secure and beneficial.
The White House also expressed its commitment to working with Congress to enact legislation protecting everyday investors. It also believes that mainstream institutions, like pension funds, should not be permitted to enter crypto markets. The paper read:
Legislation should not greenlight mainstream institutions, like pension funds, to dive headlong into crypto markets. It would be a grave mistake to enact legislation that deepens the ties between cryptocurrencies and the broader financial system.
The White House believes that traditional financial institutions’ limited exposure to cryptocurrencies in the past year has prevented turmoil in crypto from infecting the broader financial system.
Notably, the former president of the United States, Donald Trump, was a staunch crypto critic who described Bitcoin and Ethereum as useless and a disaster waiting to happen. However, Trump released his first NFT collection last month on the Ethereum network.
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