On Wednesday, President Biden is set to sign an executive order commissioning a series of assessments and reports on how the United States should regulate and expand the cryptocurrency markets.
Following months of continued pressure from entrepreneurs and venture capitalists, the White House is taking the lead in developing U.S. crypto regulations.
The White House statement points to the growing popularity of cryptocurrency in the U.S.
“Digital assets, including cryptocurrencies, have seen explosive growth in recent years, surpassing a $3 trillion market cap last November and up from $14 billion just five years prior. Surveys suggest that around 16 percent of adult Americans – approximately 40 million people – have invested in, traded, or used cryptocurrencies.”
According to the summary, the executive order will not direct any federal agency to develop new regulations limiting the use or availability of digital currency. Instead, it directs multiple federal departments to explore cryptocurrencies’ potential benefits and risks while supporting responsible innovation.
U.S. Secretary of the Treasury, Janet Yellen, has released her own statement praising the executive order. She said, “This approach will support responsible innovation that could result in substantial benefits for the nation, consumers, and businesses.”
According to the fact sheet released by the White House, the Executive Order calls for measures to:
- Protect U.S. Consumers, Investors, and Businesses by directing the Department of the Treasury and other agency partners to assess and develop policy recommendations to address the implications of the growing digital asset sector and changes in financial markets for consumers, investors, businesses, and equitable economic growth.
- Protect U.S. and Global Financial Stability and Mitigate Systemic Risk by encouraging the Financial Stability Oversight Council to identify and mitigate economy-wide (i.e., systemic) financial risks posed by digital assets and to develop appropriate policy recommendations to address any regulatory gaps.
- Mitigate the Illicit Finance and National Security Risks Posed by the Illicit Use of Digital Assets by directing an unprecedented focus of coordinated action across all relevant U.S. Government agencies to mitigate these risks.
- Promote U.S. Leadership in Technology and Economic Competitiveness to Reinforce U.S. Leadership in the Global Financial System by directing the Department of Commerce to work across the U.S. Government to establish a framework to drive U.S. competitiveness and leadership in and leveraging digital asset technologies.
- Promote Equitable Access to Safe and Affordable Financial Services by affirming the critical need for safe, affordable, and accessible financial services as a U.S. national interest that must inform our approach to digital asset innovation, including disparate impact risk. Such safe access is especially important for communities that have long had insufficient access to financial services. The Secretary of the Treasury, working with all relevant agencies, will produce a report on the future of money and payment systems, to include implications for economic growth, financial growth and inclusion, national security, and the extent to which technological innovation may influence that future.
- Support Technological Advances and Ensure Responsible Development and Use of Digital Assets 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 while prioritizing privacy, security, combating illicit exploitation, and reducing negative climate impacts.
- Explore a U.S. Central Bank Digital Currency (CBDC) by placing urgency on research and development of a potential United States CBDC, should issuance be deemed in the national interest.
President Biden’s order will also request that federal departments coordinate the prevention of the use of cryptocurrencies for financial crimes, such as evading sanctions. It also aims to create a framework to drive U.S. competitiveness and leadership in digital asset technologies.