White House: Cryptocurrency Risks Hurting US Financial Stability, National Security

WASHINGTON (Sputnik) - The recent substantial turmoil in the cryptocurrency markets shows that digital assets risk harming the United States' financial stability and national security, White House National Economic Council Director Brian Deese said.

"We've seen in recent months substantial turmoil in cryptocurrency markets and these events really highlight how without proper oversight cryptocurrencies risk harming everyday Americans' financial stability and our national security," Deese told reporters.

The Biden administration is recommending that US regulators and law enforcement agencies redouble efforts to crack down on illicit cryptocurrency activity in the United States, a senior official told reporters.

"Financial regulators like the SEC [Securities and Exchange Commission] and CFTC [Commodity Futures Trading Commission], as well as law enforcement agencies, should redouble their investigations and enforcement actions against illicit fraudulent or deceptive digital asset practices under the jurisdiction as they already have the mandate to do," the official said.

The United States has not made any decisions to establish a central bank digital currency (CBDC), Director of the White House Office of Science and Technology Policy Alondra Nelson told reporters.

"Our colleagues at the Federal Reserve have also been doing experimentation and research on whether to proceed to pursue a CBDC as outlined in their January 2022 discussion paper," Nelson said. "While no decisions have been made to issue a CBDC, our report will help policymakers understand the technical design choices of a CBDC system and how those choices can best align with the values of the Biden-Harris administration."

The Biden administration released a series of reports on Friday as part of an executive order directive from March, recommending that federal financial regulators strengthen US cryptocurrency regulations in preparation for a potential US central bank digital currency (CBDC) should one be deemed to be in the US national interest.