Secretary of the Treasury Janet Yellen made the case that regulation, when it comes to digital assets, should be based on risks, not technologies.
“Wherever possible, regulation should be ‘tech neutral.’ For example, consumers, investors, and businesses should be protected from fraud and misleading statements regardless of whether assets are stored on a balance sheet or distributed ledger,” Secretary Yellen said in delivered remarks at American University’s Kogod School of Business Center for Innovation.
“Similarly, firms that hold customer assets should be required to ensure those assets are not lost, stolen, or used without the customer’s permission,” Yellen added. “And, 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 under the Executive Order, the government will ensure consumers, investors, and businesses have adequate protections from fraud and theft, privacy and data breaches, and unfair and abusive practices.
Yellen’s comments come after President Biden signed an executive order last month calling for a whole-of-government approach to study how to regulate crypto, tasking the Treasury with leading many of the studies.
Digital assets have grown explosively, at one point reaching a market cap of $3 trillion last November from $14 billion just five years before that.
Investors looking to add digital assets exposure to their portfolios in a way that is well-regulated and tax-advantageous should consider the Invesco Alerian Galaxy Blockchain Users and Decentralized Commerce ETF (BLKC ), which takes a broader approach aiming to capitalize on blockchain developments, and the Invesco Alerian Galaxy Crypto Economy ETF (SATO ), which offers more focused exposure to the cryptocurrency industry.
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