On 09.03.2022 United States president Joe Biden Issued a first-of-its-kind executive order on Crypto directing federal agencies to coordinate their efforts in studying cryptocurrencies.

Six months later on 16.09.2022, the White House releases a "FACT SHEET: White House Releases First-Ever Comprehensive Framework for Responsible Development of Digital Assets".

The cryptocurrency industry needs substantive proposals that aim to do more than simply mitigate potential damage. The Biden administration's framework failed to acknowledge crypto's advantages.

_{Cointelegraph}

Coinbureau Analysis Of The "FACT SHEET"

According to the stats at the beginning of the report, 16% of Americans hold crypto as a part of their personal portfolio. This number is not far from NBC news research showing 21% have ever held crypto.

The report mentions that crypto has the potential to reinforce "the United States’ role in the global financial system" and discusses potential risks, e.g. Terra crash claiming it caused 600 BLN USD damage to the crypto market in the following month. This claim is debatable, because of other macro factors which most likely played role in the market crash around that time.

Areas Of The Fact Sheet

1. Protecting consumers, investors

2. Promoting financial stability

3. Countering illicit finance

4. US financial system leadership

5. Financial inclusion

6. Responsible innovation

Nine reports were created in total, all focusing on helping leading US firms to establish a strong presence in global markets.

Crypto isn't about private companies establishing global dominance. It's about developers competing between decentralised developers.

_Coinbureau

Crypto carbon footprint was called out in the Fact sheet. The authors are also calling on the central bank and treasury department to speed up CBDC creation and calling for the creation of an interagency working group to develop digital dollar

This is significant because the federal reserve and the treasury department could become one institution.

_Coinbureau

The Individual Points and Steps

Consumers, Investors, & Businesses Protection

The Fact sheet focuses on volatility and lack of transparency in crypto. They are not mentioning rewards and benefits at all. According to FBI research, scams, fraud, etc in crypto climbed 600% in 2021 as compared to 2020. Let's not get confused here. The crypto prices were much higher and therefore the total value lost in fiat money due to crime increased. The Fact sheet doesn't present many facts and stats to support its claims.

Steps

• Instruct SEC (Security Exchange Commission) and the CFTC (Commodities Future Trading Commission) to "aggressively pursue investigations and legal actions against crypto projects and companies". - Fact Sheet

• Instruct CFPB (Consumer Financial Protection Bureau and FTC (Federal trade commission) to "monitor consumer complaints and to enforce against unfair, deceptive or abusive practices". - Fact Sheet

• CFPB is one of the organisations that were created as a part of the Dot Frank Act in 2010. This is an act put together by Michael Bar in the aftermath of the 2008 financial crisis, Bar is Vice Chair of supervision at the FED. This position was created by the Dot Frank Act itself.

• "Address current and emerging risks in the cryptocurrency" and instruct the FLAG (Financial Literacy Education Commission) to "help consumers understand the risks involved". - Fact Sheet

Similarities can be seen with the IMF campaign to "educate" about CBDC and discredit crypto.

_Coinbureau

Financial Inclusion

Stats: roughly 7 Million Americans have no bank account, and 24 million rely on costly non-bank services

Authors admit that some cryptocurrencies could make financial services more accessible, though more work is needed, probably referring to stable coins anyway.

The administration is dead set on FedNow Payment as the first step to financial inclusion. The step includes using FedNow in the context of the distribution of disaster, emergency or other government-to-consumer payments.

Taxation and emergency relief are how governments around the world will likely achieve the adoption of CBDCs.

_Coinbureau

Due to no competition, the second step will be to instruct regulators to crack down on non-banking entities presumably including cryptocurrency exchanges aligning global payments practices and supervision protocols. There seems to be no escape from these dystopian systems.

To ensure adoption, instruct the national science foundation to research behavioural economics in fast payments and figure out how to convince people. They expect 12% of people in the developed world to voluntarily adopt CBDCs.

Financial Stability

Crypto and existing financial systems are becoming more connected with stable coins leading the way.

Regulators are afraid of stablecoins because most are backed by US government debt. If they become too big and there is a run on a stablecoin issuer they could dump these treasury assets on the open market.

Using Terra UST example is silly to demonstrate how much damage crypto could do to the US financial system.

_Coinbureau

The authors probably don't want to show that CBDCs are a way to subsidize government spending.

In October there will be a report about the risks! Again by an agency created by Dot Frank. It will come out at the time of possible crypto bear market lows.

Important to watch my video on the stablecoins report as they reference it as a starting point.

_Coinbureau

Two Steps In Planning

The treasury will work with financial institutions to bolster their capacity to identify and mitigate cyber vulnerabilities in cryptocurrencies. That is identifying, tracking and analysing emerging strategic risks.

Advancing Responsible Innovation

Around half of the most valuable tech companies are based in the US. Backdoor deals with the US intelligence agencies are not uncommon.

Steps

• Instruct office OSTP (Office of Science and Technology Policy) to create digital assets research and development agenda. NSF (National Science Foundation) will back social science and education research that develops methods of informing, educating and training diverse groups of stakeholders.

• Instruct treasury department and other financial regulators to provide innovative US firms developing new financial technologies with regulatory guidance, best practice sharing and technical assistance. This could be good, investors need clear regulations.

• Instruct various environmental regulators to "track digital assets environmental impacts, develop performance standards as appropriate and provide local authorities with the tools, resources and expertise to mitigate the environmental harms".

  "Opportunities exist to align the development of digital assets with transitioning to a net-zero emissions economy and improving environmental justice." - Fact Sheet

• The fourth step includes "... establishing a standing forum to convene federal agencies, industry, academics, and civil society to exchange knowledge and ideas that could inform federal regulation, standards, coordinating activities, technical assistance, and research support." - Fact Sheet

  Getting everyone on board seems likely a sign that the government feels threatened by crypto.

The US As The Leader Of The Status Quo Of Global Finance As Well The Country’s Financial Competitiveness

This point includes cooperating with unelected organisations like FATF (Financial Action Task Force) to establish global financial leadership to bring the US values into cryptocurrency.

Note, this is code for financial control and financial surveillance not freedom and liberty.

_Coinbureau

The administration plans to instruct various government agencies to partner with similar agencies around the world. This step doesn't include any mention of crypto.

The administration is set to help third-world countries develop their financial structure architecture as well as help tech companies to find a place for their products in foreign markets.

Illicit Activities

The US is pushing for KYC around the world.

"While our efforts have strengthened the U.S. financial system, digital assets —some of which are pseudonymous and can be transferred without a financial intermediary— have been exploited by bad actors..." - Fact Sheet

All crypto is pseudonymous and doesn’t require an intermediary for movement, this goes with FATF rhetoric which would label every crypto transaction high-risk as it doesn't include an intermediary

_Coinbureau

The Fact Sheet claims that crypto is being used by bad actors for illicit purposes but doesn't provide stats for that. They know only 0.15% of all transactions are related to illicit activity. 2 - 5% of all Fiat transactions are related to the illicit activity ( despite KYC and AML). This shows they haven't done anything in this regard in the last 30 years rather than creating multi-billion business of compliance companies and justified government overreach.

Steps

US politicians plan to expand US secrecy act to include crypto (will includeDeFi and NFT). All transactions over 10k $ have to be reported, also peer-to-peer which they want to get rid of. They are also pushing to raise penalties for unlicensed money transacting - going after Defi and possibly crypto wallets. There are efforts to let the department of justice prosecute digital asset crimes in any jurisdiction the victim of this crime is found.

Will the US government reach anywhere in the world?

_Coinbureau

• Instruct treasury DPT to publish reports about the illicit finance risk of DeFi and NFTs end of February and July next year.
• Continue to expose and disrupt illicit actors and impose more sanctions.
• Work with the private sector to understand illicit risks.

Digital $ CBDC

Last but not least the report talks about all the benefits of CBDC like financial inclusion, cross-border payments. It could help preserve US financial leadership and support the effectiveness of sanctions.

... however these two goals seem to be mutually exclusive. No sane country will use a digital dollar if it meant the US government could effectively turn off its economy at the flick of a switch.

_Coinbureau

"The Administration has developed Policy Objectives for a US CBDC System, which reflect the federal government’s priorities for a potential US CBDC." - Fact Sheet

The ball is already rolling, treasury department will work with FED to create CBDC.

_Coinbureau

There is no mention of all the downsides of the CBDCs. The CBDCs will give governments power to decide where, how, and what you buy and how much you can save. Borrowing will be extremely expensive and the stock market will be manipulated.

What It All Means For Crypto?

The current administration wants to crush crypto. The 2024 election is significant as it will happen during the next crypto bull run.

A wave of regulations is coming for sure - some are reasonable, unreasonable include labelling some crypto high-risk potentially killing the industry given that the United States is behind the international organizations engaging in this kind of Guerrilla regulation. American voters might be the ones who decide what comes next for crypto ...

_Coinbureau

Sources

• This Worries Me!! White House Crypto Crackdown Coming?!
• Biden‘s anemic crypto framework offered nothing new