According to a White House press release issued on Wednesday, President Biden has provided a sketch of where the country’s digital asset policy is headed in view of potential risks and benefits. The White House noted that Biden’s Executive Order is the “first ever, whole-of-government approach” to digital finance.
The news release also remarked that crypto assets jumped from a $14 billion market cap five years ago to a $3 trillion market cap last November. With its skyrocketing popularity comes new challenges, threats, and opportunities, the White House said.
In this week’s executive proclamation, President Biden set forth an agenda for regulation-to-come in six key areas: consumer and investor protection, financial stability, illicit usage, leadership in the global financial system and economic competitiveness, financial inclusion, and responsible innovation.
The Executive Order first directs the Department of the Treasury and other agency collaborators to make policy recommendations addressing the implications of the growing sector and changes in financial markets. It also suggests that regulators explore oversight and safety measures sufficient to guard against “any systemic financial risks posed by digital assets.”
The order also addresses illicit finance and national security risks by asking all relevant agencies to take coordinated action to mitigate potential abuses. Too, President Biden instructs departments to affirm international alliances capable of risk response.
Among other aims, the Executive Order directs the government to explore the possibility of a U.S. Central Bank Digital Currency (CBDC). President Biden prompts agencies to determine what technology and capacity are needed for a potential CBDC, while directing the Federal Reserve to continue its research, development, and assessment efforts into a government-backed digital currency.