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September 16, 2022

President Biden’s Framework for Digital Assets Properly Prioritizes Protecting the American People from the Many Known, Costly, and Potentially Catastrophic Risks

Public officials must ensure digital assets in fact enable wealth creation for the many, not yet more wealth extraction for the few

 

WASHINGTON, D.C.—Dennis Kelleher, President and CEO of Better Markets, issued the following statement in connection with the release of President Biden’s Comprehensive Framework for Responsible Development of Digital Assets (“Framework”):

“President Biden’s Framework emphasizing the protection of consumers, investors, businesses, financial stability, national security, and the environment has its priorities right.  While some digital assets may have potential, it is already painfully clear they have many costly, consequential, and potentially catastrophic risks. The $2 trillion in crypto losses over just several months proves that, as does the frequent reports of bankruptcies, bailouts, frozen customers funds, fraud, theft, and widespread lawbreaking.  That is why the Framework’s fulsome support for the ongoing enforcement work of the SEC, CFTC, CFPB, DOJ and other regulators and prosecutors is so important.

“As we saw with devastating consequences in the 1990s with the industry-purchased repeal of Glass-Steagall and the deregulation of derivatives, it is the standard playbook of the financial industry to hide their profit maximization motive behind claims of multiple important public purposes and objectives. The digital assets industry is following that playbook and hijacking the public policy agenda with billions of dollars in lobbying and campaign cash.  They are attempting to pressure public officials into disregarding or ignoring the many known risks and to quickly enact favorable, one-sided laws and rules that elevate their special interests above the public interest.

“The Framework rejects that pressure.  It requires all digital asset risks to be carefully analyzed and validated with robust, independent data before unleashing novel, volatile, high-risk, and potentially dangerous financial products and services on the American people, the financial system, and the economy.  As the Framework recognizes, public officials must be highly skeptical of the industry’s self-serving – and thus far largely baseless, speculative, and unproven – claims.  The pixie dust of ‘financial innovation’ and ‘new technology’ is usually little more than the seductive Siren call of disaster and cannot substitute for robust, data-driven, substantive, and independent analysis and validation followed by all appropriateprotections for consumers, investors, businesses, financial stability, national security, and the environment.

“Public officials must ensure not only that digital assets are responsibly developed as set forth in the Framework, but that wealth creation for the many, not yet more wealth extraction for the few is the result.”

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Better Markets is a non-profit, non-partisan, and independent organization founded to promote the public interest in the financial markets, support the financial reform of Wall Street and make our financial system work for all Americans again. Better Markets works with allies—including many in finance—to promote pro-market, pro-business and pro-growth policies that help build a stronger, safer financial system that protects and promotes Americans’ jobs, savings, retirements and more. To learn more, visit www.bettermarkets.org.

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