US government consults on framework for development and regulation of digital assets

Monday, 26 September 2022
The US government has released a proposed comprehensive regulatory framework for the development of digital assets, addressing the future of money and payment systems, consumer protection and money laundering risks.
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Working groups and agencies have been liaising with the government to create frameworks and policy recommendations around six priorities: consumer and investor protection, financial stability promotion, countering illicit finance, economic competitiveness in the global financial system, financial inclusion and responsible innovation.

Three reports have been released by the government: The Future of Money and Payments, Implications for Consumers, Investors, and Businesses and Action Plan to Address Illicit Financing Risks of Digital Assets.

The reports put forward numerous suggestions for a regulatory framework. They propose that agencies and regulators ‘aggressively pursue investigations and enforcement actions against unlawful practices in the digital assets space’, collaborate with each other to address risks and lead public awareness campaigns for consumers.

Additionally, it is recommended that the Department of the Treasury should ‘work with financial institutions to bolster their capacity to identify and mitigate cyber vulnerabilities’, ‘identify, track, and analyze emerging strategic risks’ and ‘provide innovative U.S. firms developing new financial technologies with regulatory guidance, best-practices sharing, and technical assistance’.

The recommendations also go beyond US borders, with proposals for government departments to collaborate with partner departments and agencies abroad and to provide technical assistance to developing countries.

The government will now consider if the proposals warrant amendments to the Bank Secrecy Act. In the meantime, the Department of the Treasury will conduct a risk assessment on decentralised finance by February 2023 and on non-fungible tokens by July 2023.

Comment on the proposals should be submitted by 3 November 2022.

Sources

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