According to sources, the Biden administration will present a crypto regulatory proposal next month. It is believed that Congress will introduce legislation to govern the rapidly expanding digital asset market.

According to Yahoo Finance, a National Security Council document would ask federal agencies to analyse the risk of crypto and provide input on the feasibility of a central bank digital currency (CBDC) or digital dollar.

The Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC) are both positioned to oversee crypto, but their responsibilities are not immediately evident.

SEC Chairman Gary Gensler has long expressed worry that unregulated crypto exchanges expose customers to fraud or unknowledgeable investments. Regulators may need to go it alone if elected officials cannot rapidly agree on what rules to implement.

For years, the digital asset industry has desired its own set of laws to increase participant confidence. Today, crypto-assets are considered as stocks, currency, and utility – or all of the previously mentioned.

In recent weeks, prominent cryptocurrencies have tanked as market instability and rising inflation hit several asset classes. A light-touch regulatory strategy for crypto that recognises the benefits of digital assets should be seen positively for the sector.

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