U.S. President Biden will sign an executive order on digital assets to maintain technological leadership

Source: White House official website

Compiled by: Nianqing, Chain Catcher

At 7 PM Beijing time on March 9, the White House officially announced that President Biden will sign an executive order today regarding ensuring responsible innovation in digital assets, stating that this is the first comprehensive government approach in history to address risks and harness the potential benefits of digital assets and their underlying technologies.

U.S. National Security Advisor Jake Sullivan stated that the order outlines the government's policy priorities, including cryptocurrencies and any future U.S. central bank digital currency, to help guide the development of the digital asset ecosystem.

"This executive order establishes the first comprehensive federal digital asset strategy for the United States, which will help the U.S. continue to play a leading role in innovation and governance within the domestic and international digital asset ecosystems, thereby protecting consumers and enhancing America's global competitiveness," said Jake Sullivan.

The announcement indicated that surveys show that approximately 16% of adult Americans (about 40 million people) have invested in, traded, or used cryptocurrencies. More than 100 countries are exploring or piloting central bank digital currencies (CBDCs), which are digital forms of national sovereign currencies.

The announcement also pointed out that the rise of digital assets creates opportunities to strengthen the U.S. leadership in the global financial system and technological frontiers, but it also poses significant impacts on consumer protection, financial stability, national security, and climate risks. The U.S. must maintain technological leadership in this rapidly evolving field, support innovation, while mitigating risks faced by consumers, businesses, the broader financial system, and the climate. Moreover, it must play a leading role in international engagement and global governance of digital assets that align with democratic values and U.S. global competitiveness.

The executive order establishes national digital asset policy focused on six key priorities: consumer and investor protection, financial stability, illegal financial activities, U.S. leadership in the global financial system and economic competition, financial inclusion, and responsible innovation.

Specifically, the executive order calls for actions to:

1. Assess and develop policy recommendations through guidance for the Treasury Department and other agency partners to address the impacts of the growing digital asset sector and changes in financial markets on consumers, investors, businesses, and equitable economic growth, protecting American consumers, investors, and businesses. The order also encourages regulators to ensure adequate oversight to guard against any systemic financial risks posed by digital assets.

2. Encourage the Financial Stability Oversight Council to identify and mitigate economic-scale (i.e., systemic) financial risks posed by digital assets and develop appropriate policy recommendations to address any regulatory gaps, thereby protecting U.S. and global financial stability and mitigating systemic risks.

3. Guide relevant U.S. government agencies to take unprecedented coordinated action to reduce the illegal financial and national security risks posed by the illicit use of digital assets. It also directs agencies to work with allies and partners to ensure international standards, regulatory capacities, and partnerships are aligned and responsive to risks.

4. Promote U.S. leadership in technological and economic competitiveness by guiding the Department of Commerce to collaborate with the U.S. government to establish a framework that enhances U.S. competitiveness and leadership in the field of digital asset technology and utilization, strengthening U.S. leadership in the global financial system. This framework will serve as a foundation for agencies and prioritize policies, research, development, and operational approaches related to digital assets.

5. Promote equitable access to secure, affordable financial services as a key national interest of the U.S., which must inform our approach to digital asset innovation, including the various impact risks. This secure access is especially important for long-standing communities, and if adequate financial services cannot be accessed, the Secretary of the Treasury will work with all agencies to draft a report on the future of currency and payment systems, including the impacts on economic growth, financial growth, and inclusive national security, as well as the extent of technological innovation's impact on the future.

6. Support technological advancement to ensure the responsible development and use of digital assets. The approach is to guide the U.S. government to take concrete actions to research and support technological advancements in the responsible development, design, and implementation of digital asset systems, while prioritizing privacy, security, combating illicit use, and reducing negative climate impacts.

7. Explore U.S. central bank digital currency (CBDC), viewing the research and development of a potential U.S. CBDC as aligned with national interests. The order directs the U.S. government to assess the technical infrastructure and capability requirements of a potential U.S. CBDC in a manner that protects the interests of Americans. The order also encourages the Federal Reserve to continue its research and development and assessment work for a U.S. CBDC, including developing a broader U.S. government action plan to support its efforts. This work prioritizes U.S. participation in multinational trials and ensures that the U.S. plays a leading role internationally in promoting the development of CBDCs that align with U.S. priorities and democratic values.

Finally, the White House stated that the government will continue to collaborate across agencies and with Congress to develop policies to mitigate risks and guide responsible innovation, develop coordinated international capabilities to address national security risks with allies and partners, and research and support technological advancements in digital assets with the private sector.

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