Biden Signs Executive Order on Digital Assets, Including Cryptocurrencies
Earlier this month, President Biden signed an Executive Order on digital assets including cryptocurrency, representing the first ever whole-of-government approach to address the benefits and risks of digital assets and their underlying technology.
“The rise in digital assets creates an opportunity to reinforce American leadership in the global financial system and at the technological frontier, but also has substantial implications for consumer protection, financial stability, national security, and climate risk,” read a fact sheet released by the White House ahead of the announcement. “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.”
“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 fact sheet continued.
Digital assets have grown massively in recent years, passing a $3 trillion market cap in November 2021, which is up from $14 billion just five years ago. Surveys found that 16 percent of American adults—nearly 40 million people—have used, traded, or invested in cryptocurrencies.
American Banker noted that the order will take a broad look at the industry and address what officials have treated as separate regulatory spheres in the past, including financial stability, consumer and investor protection, illicit finance, financial inclusion, responsible innovation, U.S. leadership in the global financial system, and economic competitiveness.
The order calls for protection of consumers, investors, and businesses by encouraging regulators to safeguard against risks and ensure sufficient oversight. It will also encourage the Financial Stability Oversight Council to identify and mitigate economy-wide financial risks, as well as develop policy recommendations for any regulatory gaps.
Congresswoman Maxine Waters (D-Calif.), Chair of the House Financial Services Committee, supported the order in a statement, saying that it is “an important step in furthering our understanding of how cryptocurrencies and other digital assets will shape the future of our financial system and of our society.”
“My Committee looks forward to working closely with the Administration on digital assets,” she said. “We will continue to lead on this subject by holding additional digital assets hearings, and considering appropriate legislation.”
Senator Sherrod Brown (D-Ohio), Chair of the Senate Banking Committee, also showed his support for the Executive Order, stressing that “it’s imperative we strengthen our financial resilience and national security right now. That includes protecting Americans from the risks of crypto to our economy and ensuring crypto can’t be used to skirt the law.”