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    US President Signs Executive Order on Development of Digital Assets

    March 09, 2022

    The U.S. President Joseph R. Biden Jr. recently signed an Executive Order on ensuring responsible development of digital assets. The Order addresses, among others, accessibility to financial services, issues related to the implementation of a U.S. Central Bank Digital Currency (CBDC), financial stability and systemic risk mitigation via the principles of “same business, same risks, same rules,” support for digital asset technologies, and mitigation of illicit finance and national security risks posed by misuse of digital assets.

    The U.S. Secretary of the Treasury (Janet L. Yellen) and the Director of the Consumer Financial Protection Bureau (Rohit Chopra) released statements, expressing their support and the intent to take forward the work outlined in this Executive Order on digital assets. The Executive Order lists the agencies that would be involved in this interagency process referred to in the Order. Within the next couple of months, the President expects updates, including an interagency coordinated action plan, on the submission to the Congress of the National Strategy for Combating Terrorist and Other Illicit Financing. Within 180 days of this Executive Order, the President expects agencies (as specified in the Order), to submit a report on

    • how developments related to digital assets, including changes in financial market and payment system infrastructures, are impacting US consumers, investors, and businesses, as well as equitable economic growth.
    • implications of developments and adoption of digital assets and changes in financial market and payment system infrastructures for United States consumers, investors, businesses, and for equitable economic growth. The report shall address the conditions that would drive mass adoption of different types of digital assets and the risks and opportunities such growth might present to United States consumers, investors, and businesses, including a focus on how technological innovation may impact these efforts and with an eye toward those most vulnerable to disparate impacts. The report shall also include policy recommendations, including potential regulatory and legislative actions, as appropriate, to protect United States consumers, investors, and businesses, and support expanding access to safe and affordable financial services.  
    • technical evaluation of the technological infrastructure, capacity, and expertise that would be necessary at relevant agencies to facilitate and support the introduction of a CBDC system, should one be proposed. The evaluation should also include any reflections or recommendations on how the inclusion of digital assets in Federal processes may affect the work of the United States Government and the provision of Government services, including risks and benefits to cybersecurity, customer experience, and social‑safety‑net programs.
    • role of law enforcement agencies in detecting, investigating, and prosecuting criminal activity related to digital assets. The report shall include any recommendations on regulatory or legislative actions, as appropriate.
    • connections between distributed ledger technology and short-, medium-, and long-term economic and energy transitions; the potential for these technologies to impede or advance efforts to tackle climate change at home and abroad; and the these technologies have on the environment. The report should also address potential uses of blockchain that could support monitoring or mitigating technologies to climate impacts, such as exchanging of liabilities for greenhouse gas emissions, water, and other natural or environmental assets.

    Furthermore, within 120 days of this Order, an interagency framework for international engagement on digital assets should be established to augment adoption of global principles and standards concerning digital assets. Within one year of the date of the establishment of the framework required by section 8(b)(i) of this Order, the Secretary of the Treasury, in consultation with the Secretary of State, the Secretary of Commerce, the Director of the Office of Management and Budget, the Administrator of the United States Agency for International Development, and the heads of other relevant agencies as appropriate, shall submit a report to the President on priority actions taken under the framework and its effectiveness.

     

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    Keywords: Americas, US, Banking, Securities, Digital Assets, Regtech, Cyber Risk, Fintech, Systemic Risk, US Treasury, CFPB, CBDC, White House

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