By: Milana Casillas
President Biden’s executive order on cryptocurrencies marks the first time the White House has formally weighed in on the growing development and adoption of digital assets.[1]
The March 9th order, titled Ensuring Responsible Development of Digital Assets, aims to make digital assets a government-wide priority and signals openness to their potential positive impacts, not just their enforcement challenges. [2]
The order calls for directed agencies across the federal government to study and generate reports on the potential of digital currencies. [3] The topics to be examined include consumer protection, data privacy, financial inclusion, and national security.[4] The array of topics demonstrates the potentially far-reaching implications of cryptocurrency and promotes equitable access to financial services and economic competitiveness. [5]
Further, the order calls for the study of a potential U.S. central bank digital currency (CBDC). [6] This would give rise to a “digital dollar,” ushering in an unprecedented level of U.S government adoption of blockchain technology.[7] Central banks outside of the U.S. have experimented with this concept, and Biden’s executive order implores the Justice Department to assess this possibility and what would be needed for its execution.[8]
While the executive order introduces the possibility of consolidating agency oversight, the order remains open and unclear on how such a consolidation would be executed.[9]Currently, responsibility for digital assets spreads across several agencies, including the U.S. Securities and Exchange Commission (SEC), the Commodity Futures Trading Commission (CFTC), and the Internal Revenue Service (IRS).[10]
Biden’s executive order is an acknowledgment by the White House that the government has more progress to make in the area of cryptocurrency.[11] While the order lacked specificity as to the positions the administration wants government agencies to adopt, it is clear the U.S. is on, “the path of innovation as opposed to prohibition.”[12] This path taken by the U.S. might influence further adoption of innovation-friendly regulation globally.[13]
[1] Elise Hansen, Biden Order Grapples with Crypto’s Rise Laws, LAW 360, (Mar. 9, 2022), https://plus.lexis.com/newsstand#/article/1472488.
[2] The White House, FACT SHEET: President Biden to Sign Executive Order on Ensuring Responsible Development of Digital Assets (Mar. 9, 2022), https://www.whitehouse.gov/briefing-room/statements-releases/2022/03/09/fact-sheet-president-biden-to-sign-executive-order-on-ensuring-responsible-innovation-in-digital-assets/.
[3] Id.
[4] Id.
[5] supra note 1.
[6] Id.
[7] Marco Quiroz-Gutierrez, What are CBDCs? Biden’s Executive Order on Crypto may Lead to a U.S. Digital Currency, FORTUNE (Mar. 10, 2022), https://fortune.com/2022/03/10/biden-executive-order-crypto-u-s-digital-currency-cbdc.
[8] Id.
[9] Id.
[10] Sandali Handagama & Amitoj Singh, Biden’s Executive Order Draws Mixed Reactions From Global Crypto Community, COIN DESK (Mar. 11, 2022), https://www.coindesk.com/policy/2022/03/11/bidens-executive-order-draws-mixed-reactions-from-global-crypto-community/.
[11] Id.
[12] Id.
[13] Id.