On March 9th, President Biden of the United States signed an Executive Order on Ensuring Responsible Development of Digital Assets.
What is the content of the order?
The order sets the direction of the government-wide approach to address risks stemming from the rapid growth of digital assets.
In particular, the order;
- Sets out the priorities in the US approach to addressing digital assets risks
- Puts emphasis on researching CDBC design options
- Mandates government agencies to investigate their respective priority areas and produce reports with analysis as well as potential regulatory proposals
The priority areas the order urges the administration to focus on are;
- Providing consumer and investor protection
- Maintaining the stability of the financial system
- Mitigating illicit finance risks
- Reinforcing the US role in the global financial system
- Promoting financial inclusion
- Supporting technological advancement
For the priority areas, respective government agencies have been tasked with producing reports analyzing the area. Additionally, the reports should also cover proposed regulatory and legal actions.
Last, but not least, the order emphasizes the need for research and development in CBDC, including technical assessment of potential designs.
Does the order change anything in the US crypto regulatory framework?
While the order is a general direction towards a government-wide approach to digital assets in the US, it does not provide any immediate changes to the current regulatory framework nor does it explicitly state what future changes will be. However, the order puts the obligation on the government agencies with regard to regulatory proposals.
With regards to the ‘illicit finance’ priority area, the following actions are imposed on several government bodies:
- Produce additional views on illicit finance risks posed by digital assets, including cryptocurrencies, stablecoins, CBDCs, and trends in the use of digital assets by illicit actors (within 90 days)
- Present a coordinated action plan based on the Strategy’s conclusions for mitigating the digital‑asset-related illicit finance and national security risks addressed in the updated strategy 9within 120 days)
Although no immediate changes are introduced, we should expect that in the next 3-6 months, a number of potential recommendations on regulatory framework updates will be published.