Biden Administration Issues Executive Order on Cryptocurrencies

On March 9, President Biden signed a highly anticipated Executive Order outlining his administration’s cryptocurrency policy. We have previously blogged about the Biden administration’s working group on stablecoins and the Federal Reserve’s report on a potential U.S. central bank digital currency (“CBDC”).

In a White House Fact Sheet, the executive order targets six priorities, including:

The Executive Order directs the Department of Treasury to assess and develop policy recommendations and encourages regulators to ensure crypto oversight. In a statement, U.S. Secretary of the Treasury Janet L. Yellen stated that the Treasury Department will partner with interagency colleagues to “produce a report on the future of money and payment systems.” Treasury plans to convene the FSOC to evaluate the potential financial stability risks of digital assets and assess whether appropriate safeguards are in place.

The Executive Order will require the Administration, Congress, and agencies across the federal government to work towards establishing policies and regulations that will guide the ongoing development of digital assets.  To that end, CFPB Director, Rohit Chopra, released a statement this morning stressing the Bureau’s commitment to “working to promote competition and innovation, while also reducing the risks that digital assets could pose to our safety and security.”  “Today’s Executive Order recognizes that the dramatic growth in digital asset markets has created profound implications for financial stability, consumer protection, national security, and energy demand . . . [w]e must make sure Americans in all financial markets are protected against errors, theft, or fraud.”

Putting It Into Practice:  The Executive Order stresses cooperation with and the important role of the private sector to help study and support technological advances in digital assets.  Secretary Yellen also states that Treasury’s actions related to the Executive Order will be guided, in part, by market participants.  As companies in the crypto space play a critical role, they will have to contend with the approaches taken by agencies such as FinCEN, SEC, CFPB, and the federal bank regulators.  Impacted companies should continue to monitor these developments to make sure that the policies and regulations that come out after the Executive Order are clear and consistent.

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National Law Review, Volumess XII, Number 69