The U.S. Treasury Department will spend the next six months working with the White House and other federal agencies on developing cryptocurrency policy in the wake of President Joe Biden’s executive order issued in March.
“We will make policy recommendations, including assessment of potential regulatory actions and legislative changes,” Treasury secretary Janet Yellen said in a speech at American University. “We have a strong interest in ensuring that innovation does not lead to a fragmentation in international payment architectures.”
Cryptocurrency’s popularity has soared in recent years — reaching a market cap of $3 trillion in November — as have financial crimes taking advantage of the decentralized nature of the blockchain-based money.
“Our regulatory frameworks should be designed to support responsible innovation while managing risks – especially those that could disrupt the financial system and economy,” Yellen said.
While 16% of American adults, nearly 40 million people, have invested in cryptocurrency, the most prevalent users are young men. A whopping 43% of American men aged 18-29 have put money into crypto.
While the crypto community remains wary of regulation, it would at least make it easier to file taxes.
“Taxpayers should receive the same type of tax reporting on digital asset transactions that they receive for transactions in stocks and bonds, so that they have the information they need to report their income to the IRS,” Yellen said.
In addition to the Treasury secretary’s remarks, Securities and Exchange Commission chair Gary Gensler announced crypto regulation initiatives this week that he says are aimed at minimizing investor risk.
“There’s no reason to treat the crypto market differently just because different technology is used,” Gensler said at the Penn Law Capital Markets Association’s annual conference. “These crypto platforms play roles similar to those of traditional regulated exchanges. Thus, investors should be protected in the same way.”