White House cryptocurrency roadmap advises against pension funds

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The White House released a statement on January 27 that provided US President Joe Biden’s administration with a roadmap to mitigate the risks associated with cryptocurrencies. Much of the document was addressed to the US Congress along with the administration’s legislative directions.

The authors of the statement outlined a two-pronged way forward. They wrote:

We have spent the last year identifying the risks of cryptocurrencies and taking action to mitigate them using the powers available to the executive branch.

The first piece of the roadmap is the administration’s first-ever comprehensive framework for digital asset development released in September. This document was based on reports mandated by the presidential decree on ensuring responsible development of digital assets published in March.

Second, executive agencies are strengthening law enforcement and issuing new guidelines. According to the release, government agencies are developing public awareness programs to help consumers understand the risks of buying cryptocurrencies. He particularly mentions banking regulators and encourages them to continue their efforts. The statement was released the same day the Fed denied custodial bank membership of digital assets in the Federal Reserve System.

Well, keep mitigating crypto risk by protecting investors and holding bad actors accountable. Were willing to work with Congress to close regulatory loopholes, but it would be a big mistake to reverse course and deepen the ties between crypto and the financial systemhttps://t.co/qLBetgMG1e

— Brian Deese (@BrianDeeseNEC) January 27, 2023

Notably, the statement went on to provide a wish list of actions the administration would like to see from Congress, saying:

Congress, too, must step up its efforts.

The White House has a long to-do list for lawmakers. Its recommendations include expanding the powers of regulators, strengthening disclosure requirements, toughening penalties for misconduct, increasing funding for law enforcement, and following up on the advice contained in the Council’s report. financial stability monitoring body mandated by the decree.

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The authors also took the opportunity to urge Congress not to do things too:

The legislation should not give the green light to traditional institutions, like pension funds, to dive headlong into the cryptocurrency markets.

Limiting such actions prevented the spread of the cryptocurrency turmoil to the wider financial system, they noted.

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