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Biden Admin Plans to Regulate Cryptocurrency and Digital Assets

Biden Admin Plans to Regulate Cryptocurrency and Digital Assets

Can’t do anything without the government getting involved.

President Joe Biden’s administration wants to regulate digital assets like cryptocurrencies by cracking down on crime because of its “potential for misuse and harm.”

We all knew the federal government would go after cryptocurrency. Fear arises, and they prey on it.

The White House used the “crash of a so-called stablecoin” in May that “wiped out over $600 billion of investor and consumer funds” to force themselves onto us.

Biden issued an EO in March to develop frameworks “addressing the risks and harnessing the potential benefits of digital assets and their underlying technology.”

The nine reports given to the White House claim something needs to be done since these “assets pose meaningful risks for consumers, investors, and businesses.”

Our betters will take care of us, you guys. They know what is best for us. The use of crypto has increased, and there have been many stories about fraud and scams. Please, before you get involved in anything financial, crypto or not, think twice. If it sounds too good to be true, then it is.

The administration wants to make it sound like it’s all about protection, but overreach is at the heart of the plans.

It’s not about protecting the citizens. It’s all about regulation and dipping their hands in the honey pot.

What a shock. The statement from the White House buries the lede: Exploring a U.S. Central Bank Digital Currency (CBDC). A CBDC is “a digital liability of a central bank that is widely available to the general public.” Of course, the Federal Reserve would be in charge of CBDC distribution. They’ve done so well with paper money, after all. (Money machine go bbbbbbbrrrrrr)

The White House “encourages” the Fed to continue researching CBDC (their emphasis):

The Administration encourages the Federal Reserve to continue its ongoing CBDC research, experimentation, and evaluation. To support the Federal Reserve’s efforts and to advance other work on a potential U.S. CBDC, the Treasury will lead an interagency working group to consider the potential implications of a U.S. CBDC, leverage cross-government technical expertise, and share information with partners. The leadership of the Federal Reserve, the National Economic Council, the National Security Council, the Office of Science and Technology Policy, and the Treasury Department will meet regularly to discuss the working group’s progress and share updates on and share updates on CDBC and other payments innovations.

However, Republican senators have already taken steps to ban the Federal Reserve from handing out CBDC to individuals:

Failure to do so might empower an entity like the Fed to “mobilize itself into a retail bank,” allowing the agency to collect personal information of users and track their transactions. The U.S. Fed “does not” and “should not” have the authority to offer retail bank accounts, they warned.

Unlike cryptos like Bitcoin, CBDCs are issued and backed by the government. Transactions are conducted on a “centralized, permissioned blockchain.” This model will allow for the centralization of financial information of U.S. citizens. Not only can it pave the way for direct financial surveillance of American citizens, but the personal info will also be vulnerable to attack from third parties.

The bill will make sure that Congress “stands in the way” of government officials “snooping” on the financial activities of “hardworking Americans,” Grassley stated.

Our lovely Treasury Secretary Janet Yellen praised “innovation” but oh my goodness, it is dangerous, too:

“Innovation is one of the hallmarks of a vibrant financial system and economy. But as we have learned painfully from the past, innovation without appropriately addressing the impact of these developments can result in significant disruptions and harm to the financial system and individuals, especially our more vulnerable populations. The reports clearly identify the real challenges and risks of digital assets used for financial services. At the same time, if these risks are mitigated, digital assets and other emerging technologies could offer significant opportunities. These reports and their recommendations provide a strong foundation for policymakers as we work to realize the potential benefits of digital assets and to mitigate and minimize the risks.”

That means Yellen will explore a digital currency:

Treasury Secretary Janet Yellen said one Treasury recommendation is that the U.S. “advance policy and technical work on a potential central bank digital currency, or CBDC, so that the United States is prepared if CBDC is determined to be in the national interest.”

“Right now, some aspects of our current payment system are too slow or too expensive,” Yellen said on a Thursday call with reporters laying out some of the findings of the reports.

The White House included a few other buried ledes of things they’re considering to do in the future:

  • The President will also consider agency recommendations to create a federal framework to regulate nonbank payment providers.

  • The President will evaluate whether to call upon Congress to amend the Bank Secrecy Act (BSA), anti-tip-off statutes, and laws against unlicensed money transmitting to apply explicitly to digital asset service providers—including digital asset exchanges and nonfungible token (NFT) platforms. He will also consider urging Congress to raise the penalties for unlicensed money transmitting to match the penalties for similar crimes under other money-laundering statutes and to amend relevant federal statutes to let the Department of Justice prosecute digital asset crimes in any jurisdiction where a victim of those crimes is found.

The “framework for responsible development of digital assets” dives deeper into the involvement of the Department of Justice and the Treasury Department.

The administration wants to take these steps:

  • The reports encourage regulators like the Securities and Exchange Commission (SEC) and Commodity Futures Trading Commission (CFTC), consistent with their mandates, to aggressively pursue investigations and enforcement actions against unlawful practices in the digital assets space.
  • The reports encourage Consumer Financial Protection Bureau (CFPB) and Federal Trade Commission (FTC), as appropriate, to redouble their efforts to monitor consumer complaints and to enforce against unfair, deceptive, or abusive practices.
  • The reports encourage agencies to issue guidance and rules to address current and emergent risks in the digital asset ecosystem. Regulatory and law enforcement agencies are also urged to collaborate to address acute digital assets risks facing consumers, investors, and businesses. In addition, agencies are encouraged to share data on consumer complaints regarding digital assets—ensuring each agency’s activities are maximally effective.
  • The Financial Literacy Education Commission (FLEC) will lead public-awareness efforts to help consumers understand the risks involved with digital assets, identify common fraudulent practices, and learn how to report misconduct.

The DOJ launched the Digital Asset Coordinators (DAC) Network, which includes “150 designated federal prosecutors from U.S. Attorneys’ Offices.” Eun Young Choi will direct the DAC.

Attorney General Merrick Garland invoked national security because of course he did:

“As digital assets play a growing role in our global financial system, we must work in tandem with departments and agencies across government to prevent and disrupt the exploitation of these technologies to facilitate crime and undermine our national security,” said Attorney General Merrick B. Garland. “The efforts announced today reflect the commitment of the Justice Department and our law enforcement and regulatory partners to advancing the responsible development of digital assets, protecting the public from criminal actors in this ecosystem, and meeting the unique challenges these technologies pose.”

More government is never the answer.

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Comments

If you lose in the stock market, does the government protect you from that loss?

How exactly will crypto be “protected”? Yes, it’s volatile, but the only thing they want to do is tax the crap out of it on the ups and ignore the downs (except for the rich…they can write off downs because they lose more) just like the stock market.

Private banks used to issue their own currency so there’s a history of making it illegal. It worked okay but interfered with the national currency.

There used to be clearing houses whereby banks got spent currency returned to the bank it came from and settled things up with them.

A shady bank got nobody accepting its currency.

As far as I know there was no history of speculating in the currencies, they were just filling a need for currency.

    Martin in reply to rhhardin. | September 21, 2022 at 2:08 pm

    They were supposed to back said currency with gold. They were only shady if you couldn’t change the paper for gold on a given day.

Everything is either an emergency or national security to this administration.

“Wiped out over $600 billion…; ?$600 billion? Lightweights. Pishers. Dilettantes. They gotta get govt oversight involved, so the numbers get big enough to matter.

Besides, there was a crypto-crash and nobody noticed, like energy, banking, stocks, bonds, and real-estate, all of recent memory. A real crash — or policy, these days — has to count in the $1,000s per person, across the whole population. Neither less, nor localized.

These anarcho-amateures are doing it all wrong.

They should license the production of shitty art by sons of Presidents of the United States that sell for half a million dollars.

I, myself look forward to crypto having the equity, transparency and stability of the highly-managed banking system. Also real estate, stocks, bonds, commodities, and health-care both delivery and costs.

No reason those nerds should be able to just go trade among themselves however they want.

What’s their Tulip regulation scheme?

Asking for great, great, great, great, great, great, great, great, grandpa. He can get reparations, paid out to me, right?

When everything was based on gold and silver, I don’t recall all of this falderall.

    Edward in reply to GWB. | September 24, 2022 at 2:03 pm

    Roosevelt the Younger figured it was easier to control the populace when the paper money was not redeemable (except for piddling little amounts in silver when most coinage was silver.)

    Once he took us off the gold standard, he reportedly sat in bed each morning with the financial pages of the day before figuring out what he would set the price of gold at for the new day.

Some in clandestine companies combine;
Erect new stocks to trade beyond the line;
With air and empty names beguile the town,
And raise new credits first, then cry ’em down;
Divide the empty nothing into shares,
And set the crowd together by the ears.—Defoe.

Digital dollar here we come.

    CommoChief in reply to 2smartforlibs. | September 21, 2022 at 6:52 pm

    That’s the true goal; digital currency replacement of cash. The govt envied the ability of PayPal, for instance, to interfere in private transactions. A digital currency gives the govt the ability to control or restrict purchases. Not to mention monitor, record, analyze and act upon those transactions.

    Finally it allows for negative interest rates directly acting on individual bank deposits. It already happened in Europe, govt hit every account over X with a flat % decline in balance. Wiped it out as if it didn’t exist, which is way easier for a central bank in meeting its mission instead of tinkering with rates.

The same federal government that’s over $30 trillion in debt is going to protect us from fiducial irresponsibility?

ThePrimordialOrderedPair | September 21, 2022 at 11:45 pm

Transactions are conducted on a “centralized, permissioned blockchain.”

If it’s centralized then it’s not a “blockchain”. It’s just a ledger. They can try and make it look like a blockchain but it won’t be. It will just be “Joe’s Ledger” that Joe runs and records and that’s it. No technology involved, at all. But they’ll make it a linked list and call it a “blockchain”.

    It’s amazing to see. These are historic initiatives proposed by people who don’t know what they’re talking about. “Centralized blockchain”. They just running scared of bitcoin?

      BierceAmbrose in reply to gergeleh. | September 22, 2022 at 11:13 am

      It’s just name magic to them; or rather name magic for their constituents invoked for the emotional connotation. These people hate definitions; operational definitions more so.

      BierceAmbrose in reply to gergeleh. | September 22, 2022 at 11:50 am

      Imma try n lay out the distinctions for non-nerds. This is as interwingled as the actuals of classification, and handling controlled information, but…

      From the bottom up;

      1 — Math says certain manipulations are trivial-ish if you know the mystery fact; prohibitively hard if you don’t. (That may change. See “quantum computing.”)

      2 — Modern cryptography is based on a combination of that 31 magic math, known obfuscating mechanisms, protocols for handing hidden stuff between people, and implementations of those three. (Any of those may be independently compromised.)

      3 — Mechanisms of hiding info can also be used to “sign” info, to detect changes and assert origin.

      3a — As this all depends on big math, practically you can only do it on a computer.

      4 — *A* blockchain, as the term is colloquially used, creates a robust, distributed, public ledger, using 1, 2, and 3 above, plus some collaboration magic. The common use, it is also ‘peer-to-peer’, anonymous, and anyone can play.

      4a — Blockchain implementation depends on *signing* and *change detection* vie “encryption” technologies. The ledger-parts are *signed* and *tamper-proof*, but *publicly visible.*

      4b — “Bitcoin” is the first known implementation — by someone not yet identified — of distributed block chain used as a currency.

      5 — “Cyrpto Currency” colloquially means an electronic “currency.” Spouters-on about “crypto” like to talk as if it’s all bitcoin-equivalent: decentralized, peer-to-peer, etc. Under the hood *institutional crypto* uses cryptography — #1 and #2 above — without the features of 3, 4, and so on. They’re fogging things up.

      6 — Historical definition of “money”, is a mechanism of exchange using a synthetic commodity; in principal universally convertible. You have QuatLoos, so you don’t have to carry your live chickens around, looking for a doctor who will take them in trade for setting your leg. *Any8 “money” that restricts what it can convert to, when, and by whom, reduces it’s utility.

      7 — “Currency” historically, is a token, representing “money”, useful because it’s easier to manipulate for trading. Useful currency is at least durable, compact, divisible, impersonal and self-verifying. Some include “anonymous.” Live chickens make a poor currency.

      7a — Bitcoin and its relatives have the weird property of acting like near-ideal “currencies” despite the mathematical, protocol, and electronic acrobatics they depend on.

      So, an anonymous, distributed public ledger makes a nice electronic currency. Having one of that raises the question whether simply having exchange of currency is enough to make money work, or whether you need sponsoring enforcers with nuclear bombs and F-15s.

      A public & etc. ledger might also be nice for other things, like sales contracts, land deeds, public records, and etc. The counter-force is what’s the point of running the local county clerk if whoever owns that property over there is what people see on the ledger, vs. what you say it is.

      “Money” in modern financial systems is as volatile, for example when a US treasury secretary can assert that they’re just “moving a decimal point in a ledger”, then they do it.

      Government “crypto-currency” seems less like idealized currency than greenbacks, or cans of beans for that matter. It gets worse if the “crypto” means encrypted and verified by some central system you can’t see into vs. a distributed, robust, public ledger.

    Or more precisely it is not a “distributed blockchain”. Simple pen and paper “blockchain” (ledger) has been used for centuries. Real estate transactions have been “blockchained” for as long as those records have been kept.

ThePrimordialOrderedPair | September 21, 2022 at 11:49 pm

In any event …. the dollar probably isn’t going to make it that long, anyway. No one has yet started to tally the new debt service cost to the federal government with the interest rate rises. As debt turns over the federal government is going to be paying over $1.2 TRILLION a year just on debt service … and for every 1% higher the Fed goes that costs the federal government an extra $300 billion+ on yearly service.

This train is just about to derail, so I don’t think this CBDC is going to have a healthy birth.

Mary, let me help save you time in the future. Create this “macro” in your Word processing program:

“Biden Admin Plans to Regulation [fill in blank]”.

Now we know the reason for hiring all those new IRS agents. They’ll be trained for this by the time it goes into effect. Pay off your debts and stock up on the essentials while you can before the Feds take away your ability to enjoy life a little.
.

retiredcantbefired | September 22, 2022 at 4:19 pm

The next step will be the suppression of transactions in unauthorized digital currency.

Hasn’t the Chinese regime already done that?

Converting to a digital dollar is important to the authoritarian Left because it makes controlling consumption much easier. Not only will they be able to track and block transactions of products they want to ban, but they can also enforce rationing on food and fuel when the inevitable shortages occur. It will then be very useful to cut off the ability of “dangerous extremists” who oppose the state to transact at all.