Treasury Department Seeks to Educate the Public on Risks of Crypto Investing
The initiative comes amid anticipation of President Biden’s imminent executive order that will regulate the crypto landscape in the U.S.
- The U.S. Treasury wants to increase awareness and educate American households about the risks of investing in cryptocurrency.
- The initiative is being led by the Treasury’s Financial Literacy Education Commission.
- Nellie Liang, Treasury Under Secretary for Domestic Finance, has expressed her concerns about regulating digital assets in the past.
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The Treasury Department will kickstart an initiative to educate consumers about the potential risks of investing in cryptocurrency. The initiative, which will be conducted by the Treasury’s Financial Literacy Education Commission, aims to create educational resources and awareness on how crypto assets differ from other traditional means of exchange and the complexities of investing in digital assets.
Educating American Households on Crypto
In an interview with Reuters, the Under Secretary for Domestic Finance at the U.S. Treasury Department, Nellie Liang, said that the Treasury would be focusing on helping demographic groups with limited access to mainstream financial services.
Under Secretary Liang also pointed out that the increasing number of households purchasing crypto is one reason why education can be helpful and added that the increased demand could threaten the stability of the financial system.
On the potential benefits of digital asset adoption, the influential think tank stated: “We’re just trying to raise awareness without trying to stamp out new technology and new innovation.”
The initiative comes after Under Secretary Liang had expressed concerns for growing demand in Stablecoins. In a recent article in the Washington Post, she said that stablecoins are still not subject to consistent regulatory safeguards.
Stablecoins are a type of cryptocurrency with their price generally pegged to the value of a fiat currency and are widely used to trade against more volatile digital assets. The current market cap of all stablecoins combined is close to $187.5 billion.
According to the Treasury’ website, the Financial Literacy and Education Commission was established under the Fair and Accurate Credit Transactions Act of 2003, and was tasked with creating policy and developing a national strategy on financial education for Americans.
The Commission consists of the heads of 19 additional federal agencies, including the Office of the Comptroller of the Currency, the Federal Reserve, the FDIC, the SEC, and others.
Under Secretary Liang, has previously been vocal about regulating crypto assets in the U.S. by saying that agencies like the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC) could use the report from the Center for American Progress (CAP) to regulate cryptocurrencies.
In the context of regulation it is also important to note President’s Biden imminent executive order, which is set to instruct federal government agencies to do research on topics related to cryptocurrency and agree on a unified regulatory framework.
Disclosure: At the time of writing, the author of this piece was invested in cryptocurrencies.