The White House’s press release issued last month points to a global, assertive, 360-degree take on the rapidly growing digital asset space and digital asset service providers. It covers:
● Consumer protection
● Financial stability
● Responsible innovation
● Illicit finance
Further, it introduces a multi-regulator approach and places the spotlight squarely upon ensuring the stability of digital assets. For example, digital asset service providers, located anywhere, may now enter the crosshairs of US enforcers if they infringe upon a consumer located within American borders.
While this feels like an escalation, it truly represents a leap in the right direction for the digital asset space’s advancement, stablecoins and central bank digital currencies included. The White House’s release follows the European Union’s introduction of the proposed Markets in Crypto Assets regulation (“MiCA”) in June 2022, which promotes the regulated use of stablecoins and enforces registration for digital asset service providers.
Earlier in the same month, Japan passed a landmark bill designed to regulate stablecoins after the collapse of TerraUSD in May. An algorithmic stablecoin, Terra had relied on natural market forces, high lending rates, and partial reserves in Bitcoin to defend against a rout–without maintaining a one-for-one peg to a fiat currency such as the US dollar.
It can be argued that this collapse kick-started and finally woke regulators up to the great potential of digital assets, stablecoin or otherwise, and to their lurking risks as well. This is what the White House means with a reference to “responsible” innovation.
However, we cannot forget how The Bahamas passed its own landmark piece of legislation in December 2020, well ahead of the market turbulence and crypto winter. The Digital Assets and Registered Exchanges (DARE) Bill covers all facets of the digital asset sector: cryptocurrencies, stablecoins, digital asset service providers, coin exchanges, and, even, initial coin offerings.
This article reviews the White House’s press release as part of a greater, global movement supporting the future of digital assets, and how the DARE Act already hit the mark.
Read the full article here.