A new Executive Order issued by U.S. President Joe Biden, calls on federal agencies in the United States to examine the implications of the dramatic growth in the digital assets markets absent appropriate regulation and urges them to consider launching a U.S. Central Bank Digital Currency (CBDC).
The Order aims to reduce the risks that digital assets might pose to the protection of consumers, investors and businesses; achieve financial stability and financial system integrity; combat and prevent crime and unlawful finance; protect national security; create an appropriate framework for exercising human rights; promote access to safe and affordable financial services; encourage responsible development and use of digital assets.
The term “digital asset” in the Order refers to any CBDC, other representations of value, or financial assets and instruments, that are used to make payments or investments or to transmit or exchange funds, which are represented in digital form.
Among other things, the Executive Order instructs the U.S. Secretary of the Treasury to take the following steps:
- Submit a report on the future of payment systems, which will address the potential implications of a U.S. CBDC on national interests, economic stability, and financial inclusion. The Order also instructs the U.S. Attorney General to provide, consequent to the Treasury’s report, an assessment of any legislative changes necessary to issue a U.S. CBDC.
- Submit a report on the risks and opportunities that the broad use and trade of digital assets may present to consumers, investors, and businesses.
- Develop a coordinated action plan for mitigating illicit finance and national security risks related to digital assets. This action plan should address the required enforcement measures for increasing financial service providers’ compliance with relevant laws, including Anti Money Laundering (AML) and Combatting the Financing of Terrorism (CFT).
- Establish a framework for liaisons with foreign counterparts about the adaption, update, and enhancement of the adoption of global principles and standards transacting and using digital assets.
CLICK HERE to read President Biden’s Executive Order on Ensuring Responsible Development of Digital Assets.
