On March 9, President Biden signed a highly anticipated executive order outlining his administration’s cryptocurrency policy. We have previously blogged about the Biden administration’s working group on stablecoins and the Federal Reserve’s report on a potential U.S. central bank digital currency (“CBDC”).
In a White House Fact Sheet, the executive order targets six priorities including:
- Consumer and investor protection
- By encouraging regulators to ensure sufficient oversight and safeguard against any systemic financial risks posed by digital assets.
- Financial stability
- By encouraging the Financial Stability Oversight Council to identify and mitigate economy-wide (i.e., systemic) financial risks posed by digital assets.
- Mitigating illicit finance
- By directing an unprecedented focus of coordinated action across all relevant U.S. Government agencies to mitigate these risks.
- Promote U.S. leadership in the global financial system
- By directing the Department of Commerce to work across the U.S. Government in establishing a framework to drive U.S. competitiveness and leadership in digital assets.
- Promoting financial inclusion
- By affirming the critical need for safe, affordable, and accessible financial services.
- Promoting responsible innovation
- By directing the U.S. Government to take concrete steps to study and support technological advances in the responsible development, design, and implementation of digital asset systems.
Specifically, the executive order directs the Department of Treasury to assess and develop policy recommendations and encourages regulators to ensure crypto oversight. In a statement, U.S. Secretary of the Treasury Janet L. Yellen said that the Treasury Department will partner with interagency colleagues to “produce a report on the future of money and payment systems.” The Treasury Department will also convene the Financial Stability Oversight Council to evaluate the potential financial stability risks of digital assets and assess whether appropriate safeguards are in place.
The executive order also placed urgency on CBDC research by directing the Federal Reserve to continue their research, development, and assessment efforts for a U.S. CBDC, including the “development of a plan for broader U.S. Government action in support of their work.”
Additionally, Chair of the U.S. Securities and Exchange Commission Gary Gensler tweeted, “I look forward to collaborating with colleagues across the government to achieve important public policy goals: protecting investors & consumers, guarding against illicit activity, & helping ensure financial stability.”
This executive order does not lay out specific positions the administration wants agencies to adopt. Instead, the order directs agencies to take a deeper look at various aspects of crypto that will ultimately piece together a regulatory framework for the crypto industry.