President Joe Biden will sign a long-awaited executive action on digital assets later today. Despite concerns that the directive may result in a regulatory crackdown on the business, the document’s language is generally supportive, with the primary focus being on the coordination and consolidation of numerous agencies’ efforts within a uniform national strategy.
Consumer and investor protection, financial stability, financial inclusion, responsible innovation, the United States’ global financial leadership, and combating illicit financial activity among the six key areas of the federal government’s involvement with the digital asset ecosystem identified in the order, which directs specific agencies to lead in designated policy and enforcement domains.
The Treasury Department will lead the charge in formulating policy recommendations to address both systemic and consumer concerns related to digital assets. The Financial Stability and Oversight Council tasked with assessing global and domestic risks as well as identifying policy gaps that should be addressed. National security and combating illegal money will become a top priority for the whole government. With all relevant agencies “directing the unprecedented focus of concerted action” on crypto-related threats.
The potential of digital assets to increase financial service accessibility
In addition to mitigating concerns, Biden’s executive order recognises the potential of digital assets to increase financial service accessibility. As well as contributing to the United States’ continued global financial leadership. It instructs the Department of Commerce to develop a framework. In order to ensure that the United States remains competitive in the digital asset market.
The directive also instructs the Treasury to create a study on the “future of money and payment systems”. And encourages the Federal Reserve to accelerate research and development of a possible US central bank digital currency, or CBDC.
The executive order comes as the US government grows increasingly concerned about Russia’s ability to avoid Western sanctions. In the aftermath of its military actions in Ukraine by using cryptocurrency. Semi-informed rumours about the document’s contents began to spread one day before actually published. When Treasury Secretary Janet Yellen’s comment on the directive accidentally made public one day early.