• The White House has released a report outlining its stance on cryptocurrency regulation, calling it a “grave mistake” to deepen ties between crypto and the broader financial system.
• The authors of the report suggest Congress should act to expand regulators’ powers to prevent misuses of customers’ assets, separate crypto banking from traditional banking, and mitigate risky behaviors.
• The report also urged Congress to enact legislation to combat conflicts of interest and to protect customers from potential harm.

The White House has released a report outlining their stance on cryptocurrency regulation, calling it a „grave mistake“ to deepen ties between crypto and the broader financial system. The report was authored by members of President Joe Biden’s economic team, including Brian Deese, the director of the National Economic Council, Arati Prabhakar, the director of the White House Office of Science and Technology Policy, Cecilia Rouse, the chair of the Council of Economic Advisors, and National Security Advisor Jake Sullivan.

The report suggests that Congress should act to expand regulators‘ powers to prevent misuses of customers‘ assets, separate crypto banking from traditional banking, and mitigate risky behaviors. The authors argue that the financial industry is not moving quickly enough to provide regulatory clarification to the public, and thus legislation should be enacted to separate crypto banking from traditional banking, much like the Glass-Steagall Act of 1933, which separated commercial and investment banking.

The report also urges Congress to act to mitigate the types of risky behaviors, without naming names, i.e., Silvergate Capital, the parent company to a crypto bank that held billions in deposits from some of the industry’s most notable players. The authors suggest that Congress should enact legislation to combat conflicts of interest and to protect customers from potential harm.

The authors of the report conclude by stressing the importance of regulating the crypto industry in a way that allows for innovation and growth, while still protecting consumers. They emphasize that any regulation should be clear, predictable, and flexible, and should account for the constantly evolving nature of the industry. The authors also emphasize that any regulation should be done in a way that is consistent with the core values of the US, such as individual liberty, free markets, and technological innovation.