The Biden administration declined to establish more stringent rules for part of the mushrooming cryptocurrency industry despite evidence that it could be at the heart of a massive scam which threatens broader economic well-being.

The President’s Working Group on Financial Markets, a multiagency initiative tasked with attempting to ensure market orderliness, said in a report released on November 1 that so-called stablecoins should be regulated like banks, but that it would be up to Congress to establish such a regulatory framework.

Cryptocurrencies consist of encrypted public records that demonstrate an entity’s ownership over the record, and transactions that the record facilitates. Advocates claim that cryptocurrencies enhance privacy and revolutionize payment processing, but their use-value has been widely questioned by critics who view the market as a highly speculative bubble waiting to burst. The computing power that can be used to obtain, or “mine,” certain cryptocurrencies also increasingly contributes to global carbon emissions, as those who question the benefit of the industry often point out. Research published by University of Cambridge found that Bitcoin mining uses more energy than the population of Argentina.

While the prices of most cryptocurrencies such as Bitcoin fluctuate wildly, stablecoins are pegged to the value of another asset, like the U.S. dollar. They are primarily used to borrow and lend money on cryptocurrency financial markets and to…

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