March 29, 2022
President Biden has signed an Executive Order (EO) outlining a whole-of-government approach to addressing the risks and harnessing the potential benefits of digital assets and their underlying technology.
The EO, the first to focus exclusively on the growing digital asset sector, lays out six priorities for the Biden administration in the digital asset space, including consumer protection, financial stability, illicit finance, economic competitiveness, financial inclusion, and innovation.
The EO directs federal agencies to better communicate their work in the digital asset sector, but it does not lay out specific positions the administration wants agencies to adopt. Similarly, the order does not announce any new regulations for cryptocurrency companies; instead it gives agencies time ranging from 60 to 120 days to formulate policy recommendations.
The EO encourages agencies such as the SEC and CFTC to specifically consider the extent to which investor and market protection measures within their respective jurisdictions may be used to address the risks of digital assets and whether additional measures may be needed. SEC Chair Gary Gensler has stated that he looks forward to collaborating with colleagues across the government to achieve important public policy goals of protecting investors and consumers, guarding against illicit activity, and helping ensure financial stability.
In addition, the EO directs government agencies to examine the issues involved with a digital dollar and what it could mean, including the creation of a U.S. central bank digital currency, whether Congress would need to pass laws to establish a digital currency, and any technical issues surrounding the creation of a digital currency.
The IAA supports the administration’s directive to federal agencies to study digital assets, which today are regulated by a patchwork of rules from multiple agencies, including the IRS, CFTC, and SEC. It is important for various agencies and Congress to work closely together to provide greater clarity and consistency with respect to oversight of this rapidly growing industry.
See Executive Order on Ensuring Responsible Development of Digital Assets, available on the White House website.
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