Billed as the “first ever, whole-of-government” approach to cryptocurrencies, Biden’s highly anticipated executive order on “responsible development of digital assets” rallies federal agencies to coordinate efforts to study what policies and tools the US could use to combat the risks of cryptocurrency while keeping the US at the forefront of technology and the global financial system. “The United States must maintain technological leadership in this rapidly growing space, supporting innovation while mitigating the risks for consumers, businesses, the broader financial system, and the climate,” the White House said. SEE: Why should we care about cryptocurrency? The business case for taking a closer look It said surveys suggest that around 16% of adult Americans – approximately 40 million people – have invested in, traded, or used cryptocurrencies, while over 100 countries are exploring or piloting Central Bank Digital Currencies. “And, it must play a leading role in international engagement and global governance of digital assets consistent with democratic values and U.S. global competitiveness.” The order directs the Treasury department and other agencies to “develop policy recommendations” to address the implications of a growing cryptocurrency sector and changes in financial markets for consumers, investors, and businesses. It also encourages regulators to explore what safeguards they have for system financial risks posed by digital assets. “President Biden’s historic executive order calls for a coordinated and comprehensive approach to digital asset policy,” said U.S. Secretary of the Treasury Janet L. Yellen. The Treasury has been tasked with producing a report on “the future of money and payment systems” that includes what it means for economic growth, financial growth and inclusion, and national security. Reuters yesterday reported the Treasury’s ‘future of money’ report would be due in 180 days, which could influence policy on releasing a US CBDC. SEE: Meet your new Crypto Coach: Less confusion, more answers The order states it seeks to “place urgency” on the research and development of a US CBDC and asks the Federal Reserve to continue its current research into the pros and cons of a CBDC. It also directs the Department of Commerce to work with agencies to drive US competitiveness in digital asset technologies. Finally, it directs all relevant federal agencies to focus on coordinated action to combat illicit finance and national security risks from illicit use of digital assets.
