On 16 September 2022, the White House has published draft of the regulation framework for the cryptocurrency industry. It was a result of President Biden's executive order directing the US governmental agencies to coordinate their efforts in regulating cryptocurrency sector.

The key goals behind the regulation included adoption of consumer protection measures, maintaining financial stability, preventing illicit use of cryptocurrency, keeping US leadership in global finance sector and responsible technology innovation. Executive order also provided for expansion of cooperation between the US and its partners via G7, G20, Financial Action Task Force on Money Laundering (FATF) and Financial Stability Board (FSB).

Federal agencies that were asked to share their reports on the adoption of digital assets included Federal Trade Commission (FTC), the Securities and Exchange Commission (SEC), the Commodity Futures Trading Commission (CFTC), Federal banking agencies, and Consumer Financial Protection Bureau (CFPB). Other governmental agencies were required to assess the financial stability risks and illicit use of cryptocurrencies.

The result of intragovernmental consultations and cooperation on this matter was a fact sheet consisting of seven principles:

1. Protecting Consumers, Investors, and Businesses;
2. Promoting Access to Safe, Affordable Financial Services;
3. Fostering Financial Stability;
4. Advancing Responsible Innovation;
5. Reinforcing Our Global Financial Leadership and Competitiveness;
6. Fighting Illicit Finance;
7. Exploring a U.S. Central Bank Digital Currency (CBDC).

The cryptocurrency community and experts' reaction to the proposed framework has been rather ambiguous. Many reproached regulators for emphasizing "aggressive pursue investigations and enforcement actions" against unlawful practices, and not addressing the specific distribution of regulators' responsibilities in the sector. Others have stated that the proposed approach regulation is required for fair market and responsible technological innovation.

The framework document recognizes high volatility of cryptocurrencies and the existence of fraud projects in the sector. Some may notice the general tone of the fact sheet to be that of increasing control over cryptocurrency issuers and service providers. This was seen negatively by some part of cryptocurrency community arguing that companies will go offshore from the US in order to become less controlled and operate with more flexibility.

Cryptocurrency mining has also been described as a negative practice in terms of its climate impact (data based on Office of Science and Technology Policy (OSTP) report), which is proposed to be tracked for each individual cryptocurrency utilizing Proof-of-Work (PoW) consensus mechanism.

Unlicensed cryptocurrency exchanges and non-fungible token (NFT) platforms will become explicitly illegal following proposed amendments to the Bank Secrecy Act, and other related laws, including anti-tip-off statutes, and laws against unlicensed money transmitting, which may be initiated in future.

In the context of promoting the access to financial services, the document mentioned new federal instant payment system that is being developed by the Federal Reserve called FedNow.

The Central Bank Digital Currency (CBDC) was also mentioned as one of the ambitions of the US government; however, as the document provides, further research and development on the technology that will support the CBDC is required. What is peculiar is recognition of the fact that the use of CBDC may support the effectiveness of international sanctions applied by the US government.

Special attention was given to stablecoins and their ability to disrupt financial stability of economy, if not regulated appropriately. The document mentioned the crash of TerraUSD that resulted to "the subsequent wave of insolvencies that erased nearly $600 billion in wealth". With this in mind, the US Treasury has been given an objective to both cooperate with financial institutions to mitigate both cybersecurity risks and strategic financial risks that certain digital assets may contain. The US Treasury will also be responsible to complete an illicit finance risk assessment on decentralized finance (DeFi) by mid 2023.

According to the statistics, nearly 16% of Americans, which is 40 million people, have invested in or traded cryptocurrency. We can expect further developments of the US cryptocurrency regulation framework; however, its fundamental principles have already been stated. It may be additionally harmonized in some parts with the European Union's recently agreed Markets in Crypto-Asset (MiCA) regulation. In case the US cryptocurrency regulation framework will be much stricter than that of other countries, it may, indeed promote a so-called regulatory arbitrage. It is the task of the US to either balance its internal rules to still provide opportunities to businesses while maintaining fair degree of consumer protection, or to impose its rigorous regulatory approach via international organizations and standard-setting bodies to the rest of the world.