The White House is set to release an executive order today regulating cryptocurrency. CEI Senior Fellow John Berlau expressed concerns about the order and the proper scope of government oversight over the crypto market.
“To ensure both the economic well-being of American consumers, investors and entrepreneurs, any executive order or action must instruct agencies to follow, not exceed, the law in regulating cryptocurrency. It must also recognize the numerous ways cryptocurrency and byproducts like stablecoins and NFTs (non-fungible tokens) have provided vital assistance to Ukrainians and others facing oppression and financial instability.
“The order also must not follow the mistaken path of having the Financial Stability Oversight Council – the consortium of regulatory agencies created by Dodd-Frank – declare some cryptocurrencies as ‘too big to fail’. Such a proclamation would create a self-fulfilling prophecy in which individuals would disregard risk in cryptocurrency transactions because a bailout would be expected. Central bank digital currency should also be rejected, as it does not achieve its advertised benefits of financial inclusion but does raise massive risks to privacy and disruption of bank deposit-based lending.
“Finally, the order must respect the free speech and privacy rights of Americans by ensuring that regulatory agencies do not have sweeping powers to freeze or seize crypto accounts and digital wallets without due process of law.”