Former CFTC Chair Christopher Giancarlo authored an op-ed published in The Hill stating that the U.S. “must influence” CBDC development toward protecting “democratic values like freedom of speech and the right to privacy,” leveraging current technology used by some cryptocurrency protocols. He noted that anti-money laundering and know your customer measures are outdated and constitutionally questionable and cryptocurrency technology can do better.

The Federal Reserve is assembling a new cryptocurrency-focused team to help ensure that it is keeping tabs on developments in the industry. Federal Reserve vice chair for supervision Michael Barr said that the group would help bolster oversight abilities. He warned about potential dangers of stablecoins and said that the central bank is working on additional crypto guidance. In regards to this new team, he explained that “we are creating a specialized team of experts that can help us learn from new developments and make sure we’re up to date on innovation in this sector.”

The Hill published an op-ed written by Chair Gary Gensler in which he outlines his perspective on the crypto industry. In it, he writes, “Some have criticized the SEC for bringing cases — or even just investigating — crypto issuers and intermediaries. Some have said that we should let the innovation flourish or risk it going overseas. But forsaking investor protection puts real people’s life savings at risk. Enforcement is a tool, not the destination. The goal is to get market participants into compliance with laws and rules and to protect our ‘clients’: U.S. investors.”

Sens. Bill Hagerty (R-TN), Mike Crapo (R-ID), Thom Tillis (R-NC), and Steve Daines (R-MT) sent a letter to Federal Reserve Chair Jerome Powell, Acting Comptroller Michael Hsu, and FDIC Chair Marty Gruenberg questioning regulators’ motivation for recent actions related to cryptocurrency. The letter references the regulators’ joint statement released January 3 suggesting that holding or issuing crypto assets is not a safe banking practice and notes that “we are especially worried that overreaching behavior by the banking regulators will inevitably bleed into other legal industries.”

The FTC has issued a consumer alert warning consumers about cryptocurrency investor scams, particularly in the context of in-person or online community groups.

House Financial Services Committee Chair Patrick McHenry (R-NC) and Rep. Ritchie Torres (D-NY) are reintroducing a bill that would reform cryptocurrency tax reporting provisions. The Keep Innovation in America Act would narrow the definition of a crypto broker for tax purposes like the regulations first introduced and passed through the Infrastructure Investment and Jobs Act. When the language was introduced in 2021, the industry said that the law’s treatment of digital assets would saddle non-financial firms such as crypto miners and certain software providers with “impossible-to-fulfill reporting requirements.” This updated bill also sharply limit the federal government’s ability to define what a “digital asset” is, thereby restricting the broad latitude the IIJA gave the Treasury Department to define crypto.

Sen. Ed Markey (D-MA) and Rep. Jared Huffman (D-CA) have reintroduced the Crypto-Asset Environmental Transparency Act, first introduced last December, which would require cryptocurrency miners to disclose their emissions and the Environmental Protection Agency to report on the effects of the mining. The bill is cosponsored by Sen. Jeff Merkley (D-OR) and would specifically require the EPA to conduct a study on the impact of miners using more than five megawatts of power on greenhouse gas emissions.

House Financial Services Committee Chairman Patrick McHenry (R-NC) and Sen. Cynthia Lummis (R-WY) sent a letter to the Federal Reserve Board, the Federal Deposit Insurance Corp., the Office of the Comptroller of the Currency and the National Credit Union Administration, asking questions about an SEC accounting directive known as SAB 121 which directs crypto firms to account for customers’ digital assets on their balance sheets. The lawmakers expressed concern that the directive discourages banks, credit unions, and other financial institutions from providing digital assets to consumer.

Treasury official Nellie Liang announced that the Department of the Treasury, Federal Reserve, Council of Economic Advisers, National Economic Council, National Security Council, and White House Office of Science and Technology Policy will be forming a working group to explore the possibility of creating a U.S. CBDC. This is the most concrete effort by U.S. regulators to consider the creation of a digital dollar. Liang said that in the coming months, the group “will begin to meet regularly to begin to discuss a possible CBDC and other payment innovations.”