The U.S. Treasury Department issued three new papers on the digital assets industry, addressing future regulatory concerns and intentions.
Six months after President Biden issued an executive order titled “Ensuring Responsible Development of Digital Assets,” the Treasury released three studies on how regulators should govern the area.
The White House’s finance department provided comprehensive summaries on three crypto-related subjects: the future of money and payments, the effect on consumers and businesses, and efforts to combat financial crime. The concerns mentioned substantially paralleled those in the White House’s crypto regulatory framework, which was also released today.
In a statement accompanying the three findings, Treasury Secretary Janet Yellen recognized the possibilities and hazards associated with digital assets. “The papers clearly illustrate the actual issues and hazards associated with digital assets employed in financial services,” she added. Nonetheless, if these dangers are minimized, digital assets and other future technologies might provide substantial potential.
The guide to the future of money and payments addressed alternative designs for a Central Bank Digital Currency, noting that a digital dollar might provide advantages such as speedier transactions and finality and the capacity to conduct international payments.
In addition, the report advised the Federal Reserve to continue researching CBDCs. In addition, the report emphasized the need for the United States to encourage “responsible innovations in payments,” implying that a new framework may be required to assist non-bank businesses.
In its assessment of the possible effects digital assets might have on consumers and companies, the Treasury highlighted potential dangers. There were three types of risks: conduct risks (such as fraud), operational risks (such as software faults), and intermediation risks (such as a crypto custodian going insolvent).
It also noted some of the possible use cases for NFTs, such as tokenizing real estate documents, paying music and film royalties on the blockchain, and authenticating items. In addition, it was stated that NFTs can represent membership tokens or tickets, but that “many of the potential use cases have yet to materialize, in part due to the evolving technological and legal landscape, including with respect to licensing, contracts, copyright and intellectual property, anti-money laundering, and data protection.”