U.S. Treasury seeks comments on cryptocurrency policy

The U.S. Department of the Treasury requested public comments on the potential benefits and risks associated with digital assets.

The request was published on July 8 in accordance with the president’s executive order issued by President Joe Biden. According to the latter, the Treasury should study the impact of cryptocurrencies on the financial system, economic growth and national security.

“For consumers, digital assets may present potential benefits such as faster payments, as well as likely risks, including those related to fraud,” said Nellie Liang, Deputy Secretary for Domestic Finance.

The authors of the document stated that the main goals of U.S. policy on digital assets are:

• protect consumers, investors and businesses in the country;
• protect the United States and global financial stability, and reduce systemic risks;
• reduce national security risks associated with illicit use of cryptocurrencies;
• support technological advancement and other measures.

“The growth in the use of digital assets and differences between communities may also pose outsized financial risk to less-informed market participants or exacerbate inequality,” the document states.

The Treasury invited public comment on a number of questions. In particular, to indicate the reasons for the popularity of cryptocurrencies, to name the advantages of decentralized systems and to assess potential risks, including the loss of private keys and “the authenticity of digital assets”.

The agency will close the comment period on August 8, 2022.

Earlier, the Fed Vice Chair the Fed called for tougher regulation of the industry. She, however, did not see threats to financial stability given the relatively small size of the market and its weak link to the traditional economic system.

In June 2022, Federal Reserve Chair Jerome Powell said that the agency is closely watching cryptocurrencies. In his view, the industry has not yet had a meaningful impact on the macroeconomy.

As Cardano founder Charles Hoskinson proposed regulating cryptocurrencies in the form of a public-private partnership modeled on the Internet during congressional hearings in the United States.

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