![]() ![]() By July 7, 2022, the Treasury Department must establish a framework for interagency international engagement on adopting global principles for use and adoption of digital assets, with a report due on that group’s priority actions under this framework by March 9, 2023. By June 7, 2022, the Attorney General must report on how to strengthen international law enforcement cooperation for detecting and investigating criminal activity involving digital assets. The Executive Order lays out a number of dates by which different agencies must take specific actions. Senior Administration Officials noted on the background press call that “this executive order seeks to promote digital asset innovation while balancing their benefits and associated risks.” The Executive Order specifically points to the need for sufficient oversight to protect sensitive financial data of consumers and to guard against cybersecurity failures at major digital asset exchanges and trading platforms, which the Executive Order recognizes have already “resulted in billions of dollars in losses.” The Executive Order also details that a cohesive regulatory approach is needed to mitigate the illicit use of digital assets, including money laundering, cybercrime, and ransomware, and the use of digital assets to circumvent domestic and international financial sanctions regimes. While indicating that “many laws involving digital assets are within the scope of existing laws and regulations,” the Executive Order makes clear that there is the need for “evolution and alignment of the United States government approach to digital assets.” The Executive Order lays out six “principal policy objectives” that agencies must consider in developing their mandated policy recommendations: (1) consumer and investor protection (2) stability of the United States and global financial systems (3) mitigating illicit finance and national security risks (4) reinforcing leadership of the United States in the global financial system and technological and economic competitiveness (5) ensuring access to safe and affordable financial services and (6) supporting technological advances that promote responsible development of digital assets, expressly noting a concern for “negative climate impacts and environmental pollution” from cryptocurrency mining. The Executive Order itself recognizes the “dramatic growth” in the digital asset market, expressly noting the space reached a “market capitalization of $3 trillion” earlier this year. The mandates also include a directive to the Secretary of the Treasury to lead an effort to explore the United States issuing its own Central Bank Digital Currency (“CBDC”), often referred to as the “digital dollar.” While some commentators have suggested that the EO is “ground that has been trod before”-cross-agency cooperation and the exploration of a CBDC-Senior Administration Officials were quick to point that while it is true that these issues have been explored at length, the EO is “a way to organize with urgency so that a coherent and coordinated view on digital assets and that it’s articulated at the very highest level of our government.” Industry executives and other commentators have called the EO a “watershed moment” due to its breadth and effort to address the digital asset market as a whole. Instead, the Executive Order mandates federal agencies to take a unified approach to developing specific policy recommendations for a comprehensive regulatory framework for digital assets. The Executive Order, titled Ensuring Responsible Development of Digital Assets, does not announce any new regulations for the digital asset industry. President Biden has signed his long-awaited Executive Order on digital assets (“Executive Order”). ![]() ![]() By Kevin McCart, Kyle Fath and Nathan Leber on MaPosted in bitcoin, Cryptocurrency, Department of Justice, US Treasury ![]()
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